Key takeaways
- Anyone can get licensed and forward you a quote. Fewer agents understand the risk behind it, or have relationships with the underwriters who price it.
- In tougher classes like cyber and tech E&O, a renewal increase often reflects the market, not your business. Shopping alone may not fix it.
- When a contract requirement and a policy term don't line up, the term itself can sometimes be changed. A 30-day extension saved one client most of their increase.
- A broker of record letter lets you move your existing policies to a new agent mid-term, without starting over.
I hate to tell you this, but a lot of agents don’t know the products they’re quoting and binding for you every day.
They can get a license. But who actually teaches them about risk? Who teaches them what goes into cost, and what makes a rate go up or down?
When you’re trained by a risk manager, you learn the products. You build relationships with the underwriters. And you advocate for your clients, which means explaining every part of their operation to the carrier so they get the best price and the best value.
Here’s what that looks like in practice.
A renewal, a contract, and 30 days
A technology company was referred to me recently. They build software that solves operational problems for commercial businesses.
One of their client contracts required them to carry $5 million in cyber and tech E&O coverage, plus a $5 million umbrella. Their policies were up for renewal within the next 30 days.
The renewal from their prior agent came back with a big increase. That isn’t unusual right now. Cyber and tech E&O is a class where we’re seeing steep increases, because there are a lot of cyber claims being paid.
The agent sent over the quote and said, here’s the cost.
Of course the client was shocked.
Shopping wasn't the answer
We went to market and shopped it. The prices they had were actually still the best ones out there.
That’s worth saying plainly, because it happens more than people think. A renewal is priced in today’s market. The policy you’re comparing it to was written a year ago, in a different one. It isn’t an apples-to-apples comparison, and shopping won’t always close that gap.
So we looked at the contract instead of the quote.
The detail that changed everything
The contract only obligated them to carry those limits for 30 more days.
So we went to the carrier and asked: could we extend last year’s policy for 30 days, at last year’s terms and premium, and then rewrite the policies with appropriate limits once the contract ended?
The carrier said yes.
That answer came back because I had a relationship with the underwriter at the wholesaler, and the wholesaler had a relationship with the carrier. A request like that doesn’t get far as a form submission. It gets done between people who know each other.
These are simple problems we solve every day. For a lot of business owners, they've become very complex ones.
What we did, step by step
| Step | What it did |
|---|---|
| Broker of record letter | Moved the client’s existing policies to our agency, mid-term, without cancelling anything |
| 30-day extension | Kept the contract-required limits in place for the time remaining, at a fraction of the renewal cost |
| Rewrite at expiration | New policies, written to the limits the business actually needs once the contract obligation ends |
The extension cost them a fraction of what the renewal would have. When it runs out, we’ll write new policies with the right limits, so they have what they need and still get good value for their insurance.
What to expect from your agent at renewal
A renewal quote is the start of the conversation, not the end of it. Before you accept a large increase, it’s fair to ask your agent:
- What's driving the increase: my business, my claims, or the market for this class?
- Have you looked at my contracts to see what limits I'm actually required to carry, and for how long?
- Is there a way to adjust the term, the limits, or the structure instead of just re-pricing the same policy?
- Who are you talking to at the carrier or wholesaler, and have you talked to them about my account specifically?
If the answer to most of those is a shrug, it may be time for a second opinion. You don’t have to wait until your policies expire to get one. A broker of record letter can move them whenever you’re ready.
For a broader look at where coverage tends to slip through the cracks, see five coverage gaps most DFW businesses miss.
Frequently asked questions
Renewal came back higher than you expected?
