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Agent of Record Letters

September 22, 2017 by Sovereign Risk Solutions · Leave a Comment

What is an Agent of Record Letter or AOR?  An AOR is a written declaration by an insured designating which insurance agency they want representing them in the insurance marketplace, or to a specific insurance company within the marketplace.  

In the Property and Casualty marketplace, most insurance carriers will only work with a single agency at a time on a specific client.  This is completely different than the health insurance marketplace, where most insurance companies will quote for multiple agencies simultaneously on the same client. 

Confusing?  Yes, even to many persons who work in the insurance industry!  

insurance paperwork signature

So, what’s the big deal about AORs?  Simply put, they are important instruments that are frequently misunderstood and misused, resulting in harm to both client and agent.  There are certainly times when an AOR should be used and when they should not.  Let’s explore both scenarios. 

An AOR should be used when a client is dissatisfied with the service of their agent or agency, there’s a communication disconnect, or they simply don’t feel like they’re being treated as a valued client.  In these cases, the client relationship has simply become stale. Perhaps the salesperson who wrote the business may have moved on to another agency or line of work leaving the client relegated to being the “glorified house account” receiving limited attention and service. Unfortunately, it happens in practically every agency in the country, and on every size of client.

Another situation an AOR should be executed to move the business from one agency to another is when the client perceives there’s a significant expertise gap between the agencies value propositions or expertise.  For example, let’s say the GENERAL INSURANCE AGENCY has a single milk delivery client and only provides basic insurance intermediary services.  The milk delivery company later becomes aware of MILK INSURANCE AGENCY. They have developed a specialized and tailored placement and service process specifically designed for milk delivery companies that includes safety management, dedicated claims and litigation management, and an excellent reputation affirmed by their extensive milk delivery clientele.  In this case, the milk delivery company believes its business will be better protected, serviced and monitored by the MILK INSURANCE AGENCY, and they execute an AOR that terminates the representation from GENERAL INSURANCE AGENCY. 

Unfortunately, many times clients are misled into signing an AOR by a competing agency by simply telling the client “sign this paper so I can get you a quote from XYZ Insurance Company.”  What they fail to disclose to the client is that by executing the AOR they are in fact terminating or blocking the incumbent agent and agency.  Again, there are reasons agencies should lose their business as noted above, but not from a competing agent being less than fully transparent and honest with them.  If you are asked to sign an AOR so the agent can “get a quote” hopefully you’ll recognize the game being played and will not fall prey.  

Another all-time AOR ploy by some less scrupulous agencies is telling a client “We are the biggest agent for ACME Insurance Company and therefore we’ll get you a better deal,” or “We have a special relationship.”  Don’t fall prey to these underhanded and deceptive attempts to literally steal your business from your incumbent agent/agency who worked hard to gain your business in the first place.  Ask for specific examples of how and why their agency is better prepared to represent your company and steward your insurance programs.    

There are legitimate times and reasons to execute an AOR.  We urge you to understand that by signing the document you are hiring AND firing the respective agents and agencies and to use informed discernment in making the decision.  As always, we are available to discuss the circumstances in your specific decision-making process as respects all aspects of your risk management and insurance programs. 

Filed Under: News · Tagged: agency, Agent of Record Letter, AOR, insurance

Repost: Top 10 states for boat and other watercraft accidents & thefts

June 22, 2017 by Sovereign Risk Solutions · Leave a Comment

This article was originally published on PropertyCasualty360.com.

A day on the water can be full of adventure, bonding with family and friends and just plain fun.

Far too often, however, recreational watercraft outings turn tragic. Insurance coverage is a smart idea to protect boats against physical damage from accidents, as well as theft. Make sure your insurance clients are covered for all their boating adventures.

Recreational boating continues to grow in popularity and risk. In 2015, there were 11.9 million registered recreational watercraft in the United States, up from 11.8 million in 2014, according to the Insurance Information Institute.

Costly boating accidents

Sadly, there are thousands of recreational boating accidents per year. Contributing factors to these accidents include traveling too fast for water or weather conditions, driving under the influence of drugs or alcohol, failing to follow boating rules and regulations, carelessness and inexperience.

A recreational boating accident must be reported to the U.S. Coast Guard if:

a person dies or is injured and requires medical treatment beyond first aid;
if damage to the boat or other property exceeds $2,000;
if the boat is lost or if a person disappears from the boat.
Alcohol, drugs and boating don’t mix

The U.S. Coast Guard says that alcohol, combined with typical conditions such as motion, vibration, engine noise, sun, wind and spray can impair a person’s abilities much faster than alcohol consumption on land. Operators with a blood alcohol concentration (BAC) above 0.10% are estimated to be more than 10 times more likely to be killed in an accident than operators with zero BAC.

According to the I.I.I., alcohol was a contributing factor in 306 recreational watercraft accidents in 2015 (7.4% of all accidents), accounting for 122 deaths (19.5% of all deaths) and 258 injuries (9.9% of all injuries). Other primary contributing factors were operator inattention, resulting in 58 deaths; and operator inexperience, accounting for 37 deaths.

Additional key findings about boating accidents, include the following:

6% of fatal boating accident victims died by drowning in 2015, and of those, 85% were not wearing life jackets.
The most common types of watercraft involved in reported accidents in 2015 were open motorboats (45%), personal watercraft, like Jet Skis and WaveRunners (19%) and cabin motorboats (17%).
beached boat

Top 10 states for recreational watercraft accidents (2015)

Following are the top 10 states for recreational watercraft accidents in 2015. These numbers from the I.I.I., using data from the U.S. Department of Transportation and the U.S. Coast Guard, include accidents involving $2,000 or more in property damage and include watercraft such as motorboats, sail boats and other vessels, such as Jet Skis:

10. Tennessee

No. of accidents: 107.

Property damage: $493,000.

People injured: 65.

Deaths: 13.

9. Missouri

No. of accidents: 109.

Property damage: $817,000.

People injured: 70.

Deaths: 17.

8. New Jersey

No. of accidents: 122.

Property damage: $134,000.

People injured: 64.

Deaths: 8.

7. South Carolina

No. of accidents: 123.

Property damage: $958,000.

People injured: 80.

Deaths: 17.

6. Maryland

No. of accidents: 146.

Property damage: $1,074,000.

People injured: 125.

Deaths: 21.

5. Texas

No. of accidents: 154.

Property damage: $792,000.

People injured: 105.

Deaths: 44.

4. North Carolina

No. of accidents: 162.

Property damage: $1,492,000.

People injured: 90.

Deaths: 20.

3. New York

No. of accidents: 174.

Property damage: $1,120,000.

People injured: 96.

Deaths: 16.

2. California

No. of accidents: 369.

Property damage: $3,101,000.

People injured: 227.

Deaths: 48.

1. Florida

No. of accidents: 671.

Property damage: $9,770,000.

People injured: 390.

Deaths: 52.

Top 10 states for watercraft theft (2015)

There were 5,031 watercraft thefts in the U.S. in 2015, down 3% from 2014, according to an analysis of federal government data by the National Insurance Crime Bureau.

Of these watercraft thefts, 2,114, or 42%, were recovered by May 15, 2016. Personal watercraft (Jet Skis, WaveRunners, etc.) were the most frequently stolen watercraft, with 1,108 thefts, followed by runabouts (678), utility boats (278), cruisers (181) and sailboats (52).

July saw the highest number of reported thefts (612), and February had the fewest (251).

Here are the top 10 states for watercraft thefts in 2015:

10. Tennessee

Thefts: 119.

9. Louisiana

Thefts: 137.

8. South Carolina

Thefts: 154.

7. Georgia

Thefts: 170.

6. Alabama

Thefts: 171.

5. Washington

Thefts: 173.

4. North Carolina

Thefts: 192.

3. Texas

Thefts: 399.

2. California

Thefts: 528.

1. Florida

Thefts: 1,205.

Filed Under: News · Tagged: boating, insurance, liability, money, news, repost, watercraft insurance

What keeps you awake at night?

May 12, 2017 by Sovereign Risk Solutions · Leave a Comment

Sovereign Risk Solutions blogIf you’re a parent more than likely you’re thinking about the kids, their health, the struggles with math, why the daughter’s newest BFF has stopped being a BFF, the terrifying thought your eldest is now eligible for a driver’s license, and on and on and on. Of course there are always the constant concerns about the family budget, the need for a new car and the “I can’t believe we need a new roof” type expenses that pop up out of nowhere.

Even as our day ends and the daily grind comes to a close, none of us single or married, parent or grandparent ever truly escapes the everyday issues and yes, fears that seem to attach themselves to every one of us to a greater or lesser degree.

Navigating a career in the insurance business for 45 plus years has developed a sixth sense in me which adds to my and our fine young staff’s “awake at night” burden. You see, each client for whom we undertake the responsibility of protecting from catastrophic economic harm becomes a part of our family. As the protectors of our family we worry, we challenge ourselves and we dissect the minutia of exposures which represent the risks our client family faces every day. It’s not a perception but rather the reality of our client family that drives me and the folks who work with me at Sovereign to present to you the options needed to protect yourself and your business from the fates which plague every family and every business every day.

Perhaps by us keeping watch and staying awake at night, we can lessen the load and allow you to get a little bit of worry free sleep…except for the driver’s license thing of course!

Filed Under: News · Tagged: Family Protection, insurance, Sovereign Risk Solutions

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