This story appears in the
May 2004 issue of
Entrepreneur.
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There may be certain times of the year when it's easier for
you to deal with renewing your insurance policies. If your policies
are expiring at an inopportune time-say, during your off
season, when you have less available income to pay your
premium-it's possible to change your renewal date.
One alternative involves early termination and renewal of the
policy to get you on the schedule you prefer. Or you might renew
with a one-time, short-term policy and then return to an annual
coverage period.
"There is no penalty for doing this. It's simply a
matter of talking with the agent or insurer as [far] in advance as
possible," says Alejandra Soto with the Insurance Information
Institute in New York City. But, she warns, "Be careful,
and make sure there isn't a lapse in coverage when the renewal
date is moved."
Another issue to consider is rate increases. Your rates are
fixed for the term of the policy, but if you terminate early and
renew, the new policy may reflect a rate increase that would not
have affected you until the original policy expired.
Getting your renewal dates where they work best for you may take
research and juggling for a year or so, but the results will be
increased internal efficiency, improved cash flow, more accurate
planning and forecasting, easier bookkeeping, and the peace of mind
of knowing you have the best coverage for your circumstances.
Jacquelyn Lynn is a freelance business writer in Orlando,
Florida.