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June 7, 2017

There are a few common scenarios in which an insurance company might reevaluate a piece of business and make adjustments.

  1. One of the things underwriters look at to determine premiums is loss experience data.  If there were significant losses to your “class” of risk during the previous policy period, your premiums might go up as they consider that class of business more risky as a whole.  For example, one year there might be a lot of fire losses to restaurants and even if your restaurant was not affected, your premiums might still go up.
  2. A reported material change would cause either coverage to be denied or premiums to change.  I see this happen most often when an insured decides to allow their burglar alarm monitoring subscription to lapse. This type of change is considered material and would need to be reported to the insurance company. The result is either a premium increase or a denial of coverage (ie. for jewelry stores).

This article was originally written for Insuranceopedia

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