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Reply to Chargebacks - Non Standard Auto Business     
Old 06-23-2017, 09:34 AM   #1
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Chargebacks - Non Standard Auto Business Chargebacks - Non Standard Auto Business
Hello all, I own an Independent P&C Agency in Florida. 95% of our business is non-standard auto due to our location. I love the business, and I know it can be profitable, one look in our area and there are agencies all over the place that have been there for a long time, so they must be making money. My question is; we have SO MANY chargebacks due to non-payment. What sort of system do you have in place for these clients? I don't understand how so many people can drive around without car insurance, it boggles my mind but that just seems to be the market we are in. It seems we have to almost be a collection agency to remind people to pay their bill. Any thoughts/experience on this would be super helpful. Thank you!
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Old 06-23-2017, 11:03 PM   #2
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Chargebacks - Non Standard Auto Business Re: Chargebacks - Non Standard Auto Business
Request commissions as earned. It's the only way to have any stability/predictability with this market segment. Most NSA carriers prefer this method, and others will comply with the request if made.
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Old 06-24-2017, 09:27 AM   #3
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BlockO on Chargebacks - Non Standard Auto Business
 
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Chargebacks - Non Standard Auto Business Re: Chargebacks - Non Standard Auto Business
Originally Posted by Neil813 View Post
It seems we have to almost be a collection agency to remind people to pay their bill.
I would discourage that practice because it sets a precedent.... the customer starts to think that they're ok until they hear from you, and you become a babysitter.

I've done non-standard auto for 7 years.... you can't eliminate chargebacks completely, but I've found that this strategy cuts it way down:

-don't call them for the reason I mentioned above... let them get cancelled for non-payment.

-as long as they pay during the reinstatement period, I let it go.

-but if they pay so late that I have to re-write the policy, that's a problem! I'll let them get away with one re-write (maybe two if they've been with me for a while), but no more than that!

-after one or two re-writes, I only quote them with 30 day policies. if they want longer than that, they need to pay in full for 2,3 or 6 months.

-after a while, the customer will either get it, and pay more punctually, or they'll go away and become another agent's problem. either way, chargeback problem solved.

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Dan Lyles
Lyles Insurance

Serving Ohio, Michigan, Pennsylvania, Indiana, Virginia and West Virginia.
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Old 06-24-2017, 03:46 PM   #4
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insurance1822 on Chargebacks - Non Standard Auto Business
 
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Chargebacks - Non Standard Auto Business Re: Chargebacks - Non Standard Auto Business
non standard business are all worthless bums.

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GO INDY OR GO HOME!
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Old 06-26-2017, 11:35 AM   #5
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Chargebacks - Non Standard Auto Business Re: Chargebacks - Non Standard Auto Business
Little harsher than I would've phrased it...but yeah...xyzn
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Old 07-25-2017, 12:46 PM   #6
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Chargebacks - Non Standard Auto Business Re: Chargebacks - Non Standard Auto Business
Just charge them an application fee every time you write a policy. You don't have to return the fees and it pays you for your or your csr's time.

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Half the people you know are below average.
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Old 08-15-2017, 03:59 PM   #7
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Chargebacks - Non Standard Auto Business Re: Chargebacks - Non Standard Auto Business
Wish I could charge app fee in our state. Totally agree with the comments made saying do not call them to remind them of payments etc. That absolutely will make it so you have to do it month after month after month. The best thing we ever did years ago was turn down the non standard stuff. It always looks good on paper but the charge backs each month always made 2k checks closer to 500.00. It was a never ending game of reinstatements, cancels, rewrites and mind numbing conversations.
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Old 08-16-2017, 02:54 PM   #8
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BlockO on Chargebacks - Non Standard Auto Business
 
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Chargebacks - Non Standard Auto Business Re: Chargebacks - Non Standard Auto Business
Originally Posted by RickGerlock View Post
It always looks good on paper but the charge backs each month always made 2k checks closer to 500.00. It was a never ending game of reinstatements, cancels, rewrites and mind numbing conversations.
If you had that many chargebacks, then there was a major flaw in procedure as far as not weeding the bad customers out. I will give customers a free pass, maybe two if they've been with me for a while.... but after that, I only write them 30 day policies... any longer than that, I would require payment in full..... that either straightened people out, or they became someone else's problem.
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Old 08-16-2017, 03:47 PM   #9
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Chargebacks - Non Standard Auto Business Re: Chargebacks - Non Standard Auto Business
Originally Posted by BlockO View Post
If you had that many chargebacks, then there was a major flaw in procedure as far as not weeding the bad customers out. I will give customers a free pass, maybe two if they've been with me for a while.... but after that, I only write them 30 day policies... any longer than that, I would require payment in full..... that either straightened people out, or they became someone else's problem.
I am speaking of the customers that generally were placed in Mendota, Dairyland, Kemper and the like. Not all our clients. So in other words placing them there was the way to weed them out if you will.
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