When should an agency start a commercial renewal, and what happens at 120, 90, 60 and 30 days?

What should start at each point?

What do state nonrenewal rules require?

California Insurance Code § 678.1 requires notice of nonrenewal on commercial policies it covers at least 60 and not more than 120 days before the end of the policy period, delivered or mailed to the producer of record and the named insured. The same window applies when the insurer conditions renewal on reduced limits, eliminated coverages, higher deductibles or a rate increase of more than 25 percent.

New York Insurance Law § 3426 sets the same 60 to 120 day window for notice of nonrenewal or conditional renewal, sent to the first-named insured and its authorized agent or broker. For an excess liability policy or a jumbo risk the minimum is 30 days. A premium increase of more than ten percent is one of the changes that requires the notice.

Texas Insurance Code § 551.054 requires notice not later than the 60th day before expiration for liability and commercial property policies. Florida § 627.4133 requires at least 45 days’ notice of nonrenewal or of the renewal premium on most property and casualty policies. These are four examples. Other states and other lines have different counts.

What happens if the insurer’s notice is late?

The answer is in the statute and differs by state. In California, if the insurer does not give timely notice, the policy continues on the same terms for 60 days after the insurer gives the notice. In Texas, if notice is delivered or mailed later than the 60th day before expiration, coverage remains in effect until the 61st day after the date the notice is delivered or mailed. New York’s statute has its own provisions for late notice, which should be read in full for the policy in question.

For the agency this means two things. A late notice may extend coverage, so do not assume a policy ends on its expiration date without checking. And the extension is short, so replacement work starts the day the notice arrives.

An errors and omissions bulletin from Utica National tells agents to “treat accounts that are being non-renewed as a priority, keeping a short diary to ensure coverage is replaced prior to the non-renewal date”, and to tell the insured as soon as possible if an acceptable replacement may not be found.

What should the renewal record hold?

The 120, 90, 60 and 30 day steps above are a working calendar, not a rule. Only the notice periods come from statute. Large or hard-to-place accounts may need to start earlier.

• Each policy, its insurer, expiration date and governing state, with the notice deadline for that state and line.
• The date exposures were requested and received, and the loss runs requested and received.
• Any nonrenewal or conditional renewal notice, the date it was mailed and the date it arrived.
• Markets approached, with dates and responses.
• What was presented to the insured, what the insured chose, and when.
• Confirmation of binding from the insurer, and the date the new policy was checked against the terms quoted.

Related questions

How much notice of nonrenewal must an insurer give on a commercial policy?

It depends on the state and the line. California and New York require at least 60 days and allow up to 120. Texas requires 60 days for liability and commercial property policies. Florida requires 45 on most property and casualty policies. Check the statute for each policy.

Is a large premium increase treated like a nonrenewal?

In some states it requires the same notice. California’s rule applies to a rate increase of more than 25 percent, and New York’s to a premium increase of more than ten percent, with exceptions set out in each statute.

Why request loss runs at 120 days and not later?

Because insurers have their own deadlines to respond. Florida and Oregon allow 15 calendar days and New York 10 days, and a renewal may need reports from several insurers.