In the last five years, the US economy has tumbled back and forth. With daycares being a backbone of local communities, they have felt all aspects of these moves. Being a business owner isn't easy, but daycare owners have had to overcome these wild swings. Especially with their insurance products.
The last 18 months have produced unique challenges on the daycare insurance policy front. Some have received non-renewal letters from their insurance providers, while others have been hit with massive insurance premium increases. These blows have left many owners scrambling to find insurance coverage at a price they hope they can afford.
That’s exactly what happened to a daycare in Lubbock. When their annual insurance renewal arrived, the director and board members were stunned to see their premium had jumped by thousands of dollars. Their budget was already stretched thin from inflation, and they knew they couldn’t afford the increase without a substantial change to tuition. They had no choice but to start looking for a new policy.
One of the board members took on the task of finding a new insurance provider. They assumed it would be as simple as getting a few quotes and picking the best option. But every time they called an insurance company, they were asked for something called a loss run report. None of these sales people took the time to explain exactly what a loss run is. But it was clear that without it, they wouldn’t be able to get new daycare insurance coverage.
If you run a daycare, you may find yourself in the same situation. Experienced insurance agents always request this report because it is required to get accurate daycare insurance costs. Let’s take a look at what loss runs are and why they matter when shopping for daycare insurance in Texas.
A loss run report is a record of the business insurance claims a daycare has filed over the years. It includes details about each claim, the type of incident, the amount paid, and whether the claim is still open or closed.
Insurance companies use this report to help assess the potential risk of insuring your daycare. If a daycare has few or no claims, it is seen as a lower risk, which can help keep annual insurance costs down. On the other hand, if a daycare has frequent claims or a history of large payouts, insurers may charge higher premiums or limit coverage options.
The daycare in Lubbock had been paying for insurance for years and fortunately never had to file a claim. They assumed that would work in their favor, and it will if you have the report. But without a loss run report to prove their pristine claim history, they can't move forward with any of the new insurance quotes they have been presented.
Unlike your personal auto insurance, which has a centralized database that tracks claim history, daycare and commercial auto insurance does not. This means when your daycare applies for new insurance, the insurance company has no way of knowing their claim history unless they provide loss runs from their prior coverage.
If your daycare has a history of frequent claims, especially related to property damage or liability insurance claims, the insurer may charge a higher premium, offer reduced coverage, or even deny coverage altogether. Given the complexity of the business insurance coverage that is needed for daycares in Texas, this requirement can make or break getting the type of coverage that your business needs.
When the daycare in Lubbock started calling for quotes, every insurer asked for loss runs. Without them, no agent could provide accurate pricing or even tell if they qualify for primary coverage. They quickly realized that without this report, they had no way of proving their daycare was a good risk.
The easiest way to get a loss run report is to request it directly from the current insurance provider of your policy. Insurance companies are required to provide these reports within 10 days of receiving your request. If a daycare’s current agent refuses to provide it, they are in violation of Texas law. Going straight to the insurance carrier can make this process easier in this case. Either route may require a signature, but the process should be fast and easy.
Once the loss run report is received, it’s important to review it for accuracy. Sometimes, claim amounts or types are reported incorrectly, or closed claims still appear as open. Fixing these mistakes before submitting the report to a new insurance company can help avoid unnecessary premium increases.
The daycare in Lubbock contacted their insurer directly to request their loss runs, bypassing their previous agent, who had been slow to respond. They then worked with a daycare insurance specialist at Insurance For Texans to review the report for errors before submitting it to new insurance providers. This step helped them get the most comprehensive types of coverage at the best possible annual insurance premium saving them substantial on their renewal.
Insurance pricing is based on your specific business risks. Loss runs help insurance companies assess that risk by providing a record of a daycare’s claims history. Your daycare's ability to show a clean record can help you qualify for lower premiums. If your business has a history of property damage claims or liability claims, you may need additional guidance in finding the right coverage. That is where working with an independent agent who specializes in daycare providers can be a great benefit.
True Texas Education Insurance is offered exclusively by Insurance For Texans. Their experienced agents help daycare businesses understand their policies, shop across the marketplace, and secure coverage that meets their unique, specific needs. This allows your daycare center to have a peace of mind about their financial future being protected from a catastrophe.
If your daycare is looking for new insurance, having loss runs ready is the first step. Current policy documents are another. Once you're ready, click the button below to connect with our daycare insurance specialists and start securing the right coverage for your business today.