14 Oct What Is an “Automatic” Renewal?
There is no such thing! Or there should be NO such thing. If you were at the E&O Plus Quality Management Seminar in September 2025, you know this caused quite a stir!
What I found out at the pre-dinner gathering was that the two agency staff members who were most vocal in our meeting were talking about “automated” renewals, not “automatic” renewals. So, what are we talking about here?
We fully support carriers downloading the renewal policies into your agency management system. This practice is usually for personal lines and small commercial lines and would be considered an “automated” renewal. You need to have contacted the client before, during, and/or after this renewal.
An “automatic” renewal would be one that you aren’t touching. We all know that you have a responsibility to service your customers. I provided the numbers from an interesting survey that indicated your insureds would like to hear from you six times a year. Yes, you read that right, six times. Now, that isn’t a phone call during dinner, but you can easily make contact with your insureds six times a year in this automated world – see where I went with that!
For all renewals, you should be completing a pre-renewal questionnaire. This questionnaire may be completed in person, electronically, or by U.S. mail. For many of you, we know this is “automated,” yet how many of you are getting them back? This certainly leads to disclaimers. You could send out the questionnaire, provide a deadline by which to respond, and set a follow-up. If not received by the due date, you will then need to send a second notice with a disclaimer stating that you will be renewing coverage as is (sample disclaimers can be found in Passport). Or you could send the first notice with the disclaimer. These should be tracked for receipt back; therefore, you will set a follow-up, regardless of the method used, and track those numbers.
Several agents have said that some producers are delivering pre-renewal questionnaires on larger accounts. This is a good touchpoint; yet, what do we do with the completed questionnaire? Having the insured sign it before leaving is a best practice, as mentioned by Karen Thurlow of SwissRe. She reminded us that there is nothing better than the insured’s signature. If we don’t get the insured’s signature, we would want to send them a copy with a summary of the changes being made to the renewal.
Once the policy is received, it is your responsibility to check the policy. This may be automated in your agency, yet again, it is not “automatic.” Someone has to verify that we got what we asked for or that the renewal didn’t change without our knowledge. Even with the downloaded policy, it is your responsibility to ensure it is correct.
Ironically, during our recent E&O Plus Quality Management Seminar, an attendee representing Golden Rothschild Spagnola Lundell Boylan Garubo & Bell P.C. approached me at the end of the day on Wednesday and apologized for leaving the room before the end of our discussion. He had received a phone call regarding a potential claim, and said I wouldn’t believe what it was. Do you want to guess? He had a client who assumed they received an automatic renewal. It turns out that the policy had not been renewed or received by the agency, and, of course, there was a claim. It was a non-admitted policy through excess and surplus, so there was no requirement for notice from the carrier in that state. We can be fairly confident about which policy is paying that claim.