Why You Don’t Want a January 1st Renewal Date
Written by Eric Petersen, CIC
Alongside a million other things going on at the end of the year, many tree care companies also have their package insurance (work comp, general liability, auto, etc) renewal to deal with. While there are a few advantages to having your insurance renewal on January 1st, like coordinating with your fiscal calendar year and the fact that it is traditionally a slower time for production, there are many more negatives to having your renewal at the turn of the new year.
Let’s take a look at why we recommend NOT having a January 1st renewal date.
- Holidays – Isn’t there enough happening in December already? Between family vacations and staff taking time off, the work days are always limited late in December, thereby shrinking the amount of actual time you have to renew your insurance policies.
- Underwriters are swamped – It has been estimated that 25% of all work comp renewals happen on January 1st! That is a tremendous number focused around one specific date! The underwriters that you and your insurance agent are relying on to give full attention to pricing considerations are simply swamped. They don’t have enough time to work in the level of detail that they can during other times of the year.
- Health Insurance Renewal – An even higher percentage of health insurance renewals happen on Jan. 1st. If dealing with health insurance and your package insurance on one day makes for an exciting time in your life, give me a call, we can probably find a spot on our team for you. There is almost noone that wants to go through both health insurance and your package insurance at the same time.
- License Renewals – Almost all municipalities and state departments renew their licenses on Jan. 1st. Thereby requiring all of their license holders to submit new or renewal applications that include insurance information. These license applications are held up by a slow insurance renewal or there are issues when you switch your coverage to a new insurance company.
- Tax Planning – December represents the last chance to work with your accountant on your tax planning. Like underwriters, accounting firms are very busy at the end of December as well trying to help their clients wrap up their years in the best possible financial shape.
What can you do about it? Ask your agent to switch your effective date to a different time of the year. Preferably in late summer or early fall. That time of the year is much more conducive to getting the best attention from insurance company underwriters and giving you time to still budget for the coming year. If you have been struggling with your Jan. 1st renewal date, reach out to an ArboRisk team member today to create a plan for switching the date this coming year.
If you need additional help from our team, please contact an ArboRisk team member today or sign up for our Free Insurance Coverage Review to ensure you are protecting your business as best as possible. If you are ready to take the next step, check out ArboRisk’s Thrive Risk Management New Heights Package! Our most robust risk management package, our team of industry experts can help you focus on key areas to successfully grow your company.