A coverage declination form is a document that agencies should use as part of their workflow process for situations when a client declines coverage. The client signs the form to acknowledge that they reviewed the coverage with their agent and that they are declining to purchase coverage.
While it may seem like just another piece of paperwork, the truth is that a coverage declination form can play a crucial role in protecting an insurance agency. Here are three reasons why your agency should use declination forms and make them part of your procedure manual:
1. Legal Protection
When a client refuses a certain type of coverage, having a documented declination form can protect the agency from potential legal disputes. This form can serve as evidence that the client was informed about the coverage options available but chose to decline them, thus mitigating the risk of liability for the agency.
2. New Business and Up/Cross Sell
The form encourages open communication and an opportunity for the agent to explain the available coverage options and for the client to ask questions before making a decision.
3. Relationship
This open dialogue can demonstrate the agency’s commitment to addressing the clients’ individual needs and providing tailored insurance solutions. As a result, the client may develop a greater sense of trust and satisfaction with the agency, which can lead to long-term loyalty and positive referrals.
Because you document all coverage conversations in your agency management system (if you are not documenting your system, start now) if your client doesn’t sign the form or return it, you will have proof in your AMS that it was addressed with your client.
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