4 Ways to Avoid Traps of the Agency Bill Process

July 20, 2020

While most agencies find it necessary to access policies that are only available through an agency bill set up, many can also attest to the headache involved. Having this option available can be valuable for meeting clients’ needs.  However, it can become problematic if agencies do not monitor it, and clients take advantage of it. Left unchecked, what should be another tool to better service clients can quickly turn into an account’s receivable nightmare.

Without the right practices in place, an agency can find themselves fighting an unpaid premium battle. Here are a few keys to managing the process to prevent and correct delinquent agency bill premium issues?

Address Payment Issues Early – 

Bad habits develop quickly and can be hard to break. If the insured gets away with it a few times, there is a good chance the behavior will continue. Failing to check in with the client when payment is past due sends a message that it is OK for them not to pay premiums on time. The only one feeling any pain in this situation is the agency.  

Getting payments back on track requires discussing the problem with clients sooner rather than later. Putting the conversation off will only make it worse. Reaching out to the insured and expressing concerns directly and respectfully works best. Simply calling and letting them know you are paying attention may be enough to correct the problem, but it is essential to explain the expectations for timely premium payment. The conversation may feel a little awkward and uncomfortable but is critical to ensuring that the agency does not start getting treated like a lending institution.

Get the Client’s Attention with Prompt Action – 

When premium goes unpaid, agencies are within their rights to proceed with the cancellation process. Issuing an “Intent to Cancel” notice to additional interests and certificate holders can be enough to get the client’s attention and let them know you are serious about payment issues.  

For example, your insured is a contractor who is repeatedly paying late, and the agency is left chasing down premium month after month.  

When the payment goes past due, and the cancellation process begins, the agency can then email cancellation notices to all the certificate holders. The contractor finds themselves unable to get on a job site, which leads to a call back to the agency to find out what is going on. Now that you have gotten the insured’s attention, you can reiterate the agency’s obligation to notify. Taking this step may feel extreme but gets the insured’s attention and may also be the most effective way to resolve payment issues from that point forward. 

Equip Staff for Difficult Conversations – 

Whether it is the Account Manager, Producer, or someone from accounting, employees must have the proper set of information going into conversations with clients about payment issues. This conversation could include reminding the insured of the company policy, informing them of a final due date to avoid cancellation, or leveraging someone else’s authority in the agency. Providing employees with talking points will allow them to be clear with insureds and keep the conversation focused.  

Have a Written Policy – 

Developing an agency policy for both agency employees and insureds can help remove ambiguity and keep both sides of the equation on the same page. Outlining terms for billing and payment clarifies precisely how the agency views and handles agency bill premiums. When and if issues arise, employees can quickly reference the document to remind insureds of the agency’s stance on payment and quickly eliminate confusion and push-back.

Unpaid agency bill premium will negatively impact client relationships agency finances. Following these tips will help agencies get both on track.

For more on this topic, make sure to check out the complete episode of The Independent Agent below!