MEMBER ALERT : COMMUNICATE PERSONAL AUTO RESTRICTIONS written by Beth Smoller , KAIA
As the insurance marketplace continues to evolve , more carriers are adding restrictive language to policy forms along with revisiting interpretations of underwriting guidelines and appetite . These changes can result in the potential for customers to have uncovered claims , increasing potential errors & omissions exposure for agencies . We specifically want to highlight some recent changes in the personal auto marketplace that your agency should consider communicating to your customers .
The personal auto market has been hit especially hard by increased repair costs and social inflation with overall loss ratios in Kansas reaching 5-year highs , as revealed by the 2023 Kansas Annual P & C Marketplace Summary . We are aware of several personal auto carriers who have added or are enforcing restrictive language regarding listed drivers and collision coverage . Specifically , the policy will exclude collision coverage when an unlisted driver has been a resident or member of the household for at least 185 days . Liability coverage still exists , but the carrier will not provide collision coverage in the event of a claim .
This means that your customers with youthful drivers need to remember to add them to their policy as soon as they have a permit . If that youthful individual is not added to the policy in a timely manner , the carrier can deny collision coverage if the individual is involved in an accident . This presents an increased potential E & O exposure for the agency .
As a proactive risk management approach to help
12 KANSAS INSURANCE AGENT & BROKER