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There are more
than a dozen insurance policies that
may be needed by a government contractor, and at least five insurance
companies (out of hundreds in the U.S.) that actively compete for
GCs. Each of our clients is individually underwritten. We achieve
better pricing for you by helping underwriters to better understand
and assess your company's level of risk. |
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HOW RATES ARE FILED
HOW QUOTES ARE CREATED
STANDARD RATES
THE AH&T ADVANTAGE
HOW RATES
VARY
HOW RATES ARE FILED
Generally,
the rates for each policy are filed for each state (insurance
is still regulated at the state level in the U.S.) and can vary
significantly. Furthermore, insurance companies may raise or lower
rates periodically based on their financial/underwriting results.
So, no single insurance company will always be competitive for
every insured. Finally, underwriting guidelines are used by insurance
companies to help their staff make a decision as to whether or
not to accept a risk and how to price it. An underwriter might
offer a proposal to one GC and reject another GC that seems at
the surface to be similar.
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HOW QUOTES ARE CREATED
If the underwriter wants to offer
a quote (a rate and/or premium for accepting the risk) they
apply credits, which lower the effective rate, or debits, which
raise the effective rate, to their manual rate. Credits are
generated based on factors such as the insured's good loss history,
loss control programs that are in place, or the experience of
the management team. In essence, the underwriter is making a
judgment call that his company's standard rate is higher than
necessary to accept your individual risk and they can lower
the rate and still make a profit. Debits are based on poor loss
history, especially hazardous conditions, or other factors that
increase the likelihood of loss.
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STANDARD RATES
Note: Inevitably there are certain
states that for various reasons will not approve higher standard
rates when the insurance company files those rates. The insurance
company may be "forced" to use standard rates (a/k/a
"manual" rates) that it already knows are not adequate
to cover their losses and expenses for a particular coverage
or risk. Therefore, practically speaking, the insurance company
will debit those rates on every quote to attempt to make the
rate adequate for their predicted level of risk. The business,
legal, and political environment in each state vary widely -
as do insurance rates.
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THE AH&T ADVANTAGE
By working daily with each underwriting
market, AH&T is able to give GCs advice as to which insurance
companies are likely to be competitive based on the GCs' particular
operations. We obtain premium quotes from multiple markets but
frequently it is possible to determine which market will be
best from the outset and we will advise you of this. Many GCs
discover insurance needs at the last minute and have little
time to meet with multiple carriers - in which case AH&T
will help with the selection of the best market most likely
to quickly offer a proposal and still offer competitive rates.
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HOW RATES VARY
Rates vary by state tremendously.
The same vehicle in Virginia could cost $900 a year to insure
but be $1600 in Massachusetts and $1200 in Georgia. For Workers
Compensation, a warehouse employee could have a rate of $3.00
in premium per $100 of payroll in North Carolina, but the rate
could be $8.00 in Utah, and $14.00 in California.
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