5 Ways to Lower Your Premium in a Hard Insurance Market

In today’s insurance environment—what professionals call a “Hard Market”—premiums are rising, and underwriting standards are stricter than ever. For churches, schools, and nonprofits, this can create significant budgetary strain.

While you cannot control the global economy, you can control how your organization “shows up” to an insurance carrier. Here are five strategic ways to lower your premium and take back control of your insurance renewal this year.

1. Start Your Renewal “Narrative” Early

In a hard market, underwriters are looking for reasons to say “no” or to increase rates to cover perceived risks. Don’t wait until 30 days before your renewal to start the conversation.

• Begin 120 days out. Work with your agent to craft a narrative that highlights the positive steps you’ve taken. Provide documentation of new safety protocols, roof replacements, or upgraded security systems. When you provide a “clean” submission early, you stay at the top of the underwriter’s pile.

2. Leverage the Math of Higher Deductibles

One of the fastest ways to “buy down” a premium increase is to assume more of the “small” risk yourself. If you want, you can ask your agent for a quote comparison showing the premium difference between your current deductible and a higher one (e.g., moving from $1,000 to $5,000 or $10,000). Often, the annual premium savings can pay for the difference in the deductible in just two or three years. If your organization has the cash reserves to cover a higher out-of-pocket amount, this is a powerful tool for lowering fixed monthly costs.

3. “Tidy Up” Your Claims History

Your five-year claims history is the primary data point underwriters use to price your risk. Even “open” claims with no recent activity can negatively impact your rates because the insurance company is still “holding” money in reserve for them. Because of this, try to review your “Loss Runs” (claims reports) with your agent six months before renewal. If there are old claims that should be closed or reserves that seem unnecessarily high, ask your agent to advocate with the carrier to close them out. A “cleaner” report makes you a much more attractive risk.

4. Formalize and Document Your Risk Management

Insurance carriers reward organizations that treat safety as a culture, not just a checklist. If you have a safety program but it isn’t documented, as far as the underwriter is concerned, it doesn’t exist. Provide copies of your Child Protection Policies, your Driver Safety Manuals, and logs from your Safety Committee meetings. If you can prove that you’re proactive, underwriters may be more likely to offer discretionary credits (discounts) to your organization. Showing that you have a “Return-to-Work” program for injured employees, for example, can directly lower your Workers’ Comp costs.

5. Audit Your “Exposure Base”

Your premium is often calculated based on “exposures” like your annual payroll, your student count, or the number of vehicles in your fleet. If these numbers are outdated, you may be overpaying. Conduct an internal audit of your assets. Are you still paying for a van that has been sitting in the lot with a dead engine for two years? Is your “projected payroll” for next year significantly higher than what you will actually spend? This can bring you immediate premium relief, especially if you’re paying for what you don’t need.

The best way to survive a hard market is to be the “best-in-class” version of your organization. When you demonstrate that you are well-run, proactive, and safety-conscious, agents have the leverage they need to negotiate the best possible terms on your behalf.