Commercial crime insurance plan owners in Texas may cancel their policies for reasons ranging from high cost to finding better alternatives. They may also cancel it if the policies no longer serve the intended purposes. If a policyholder cancels a policy that has outstanding premiums, the insurance company must make a refund irrespective of how the premium was funded (whether direct funding or premium financing). Whatever reason you may have for cancellation, seek the opinion of a state-licensed commercial insurance agent to understand the consequences or penalties that may come with such a decision.
To cancel your commercial crime insurance, you must inform your insurer. You do not have to give reasons for your intended action. The options available for canceling commercial crime insurance may differ for different insurers, notwithstanding., you can cancel a commercial crime insurance policy through any of the following methods:
Through telephone calls - The insurer may require a policy owner to make a phone call either personally or through an insurance agent to effect cancellation
Sending an email or a fax message - In some cases, sending an email or a fax message indicating an intention is enough
Visiting the insurer’s office - Cancellation can also be made by visiting the insurance company and letting them know your intention
Using a new insurer - If you already have a replacement, you can instruct the new insurer to contact the insurance company to make the cancellation
Canceling commercial crime insurance may come with penalties, you need to read the policy contract or contact a state-licensed insurance agent to interpret the terms and conditions of your contract.
Canceling a commercial crime insurance policy in Texas can be for a good reason, or it may have negative repercussions. A business may want to save costs by canceling a redundant policy, but if there is a need for coverage, this exposes the business to risks. Before canceling a policy, the policy owner should consider/do the following:
Compare the risks and gains involved - Before canceling an active policy, there should be a replacement policy in place. Canceling a plan without a replacement may expose the business to risks due to a lack of coverage
Think it over before canceling - Make sure to determine if it is cheaper to get a replacement plan that will serve the same purpose
Cheaper does not necessarily mean better - Most times, cheaper alternatives do not offer enough coverage. They may be cheap because some benefits are missing. Getting a cheaper alternative crime policy may result in getting less coverage for the business
Compare the cost of the plan across different insurers - Compare prices being offered by different insurers for similar coverage to avoid paying a high price for the policy
Before canceling a commercial crime insurance plan speak with a Texas-licensed insurance agent.
This depends on the commercial crime insurance company, so it is important to read the policy document before signing it. The policy contract will state the terms and conditions of the insurance, it will tell you if there are penalties or not. Usually, there are no cancellation penalties on commercial crime insurance.
You should drop your commercial crime insurance when you find a less expensive policy with the same or better coverage from a different insurer. Also, if the plan is no longer needed, there is no reason to keep paying premiums. For instance, if the business eliminates the shared workspace and goes with a fully remote workforce or downsizes to a point where employee crime is no longer an issue, the business may decide to drop commercial crime coverage as an unnecessary expense
If you are thinking about dropping commercial crime insurance coverage, speak with a Texas-licensed insurance professional, who can explain the pros and cons of your decision. A knowledgeable commercial insurance agent can assess your business needs and let you know how this cancellation will affect the business.
The chances of getting a refund of unused premiums after a commercial crime insurance coverage cancellation depends on the reason for the cancellation and the amount of unused premiums:
If you cancel a commercial crime policy that was paid in full to the insurer, the business receives the refund of the unused premium based on the date the coverage ends, The refund is usually prorated using a 365-day calendar, minus any cancellation charges that are stipulated in the contract. The refund is usually sent as a paper check from the insurer to the insured business.
If you cancel a commercial crime policy that was financed through a premium financing company, the insurer issues the prorated refund (as described above) to the premium finance company, which in turn issues the refund to the business, after taking its charges.
Getting your canceled commercial crime insurance reinstated depends on the insurer’s reinstatement policy and the Texas state law. To get commercial crime insurance reinstated, the business should:
Contact the insurance company to find out the process or reinstatement and if there are payments or penalties before reinstatement
Fill out the necessary forms
Pay outstanding premiums (if any) and undertake to pay future premiums as and when due to avoid a lapse in coverage and another policy cancellation