Since the beginning of the pandemic, The Hanover has been working with our independent agents and brokers to understand the impact of COVID-19 to our shared customers’ operations. In response, we have been reducing or reclassifying exposures, as appropriate for The Hanover’s policyholders with insured locations in California. We will continue to evaluate reduction of exposures for policyholders who are impacted. We ask that you consider where your customer is in their policy term and whether their policy is auditable or not.
For commercial auto, general liability and occurrence based professional liability policies that do not have a variable exposure base, we will be apply a 10% credit to the premium for the period of March 16 through May 31, 2020.
- For commercial auto, non-variable general liability and occurrence professional liability: we will issue a 10% automatic premium credit for the period of March 16 through May 31, 2020.
- For workers’ compensation and variable general liability: we ask that you communicate with your Hanover customers to provide you with information to help us assess the potential for reductions or reclassifications of their exposures.
- For property, umbrella, claims-made professional and all other products, we will not be applying a premium credit. Our analysis indicates that there is no reduced loss propensity for these policies. As such, no premium credits will be applied.
Policies currently at minimum premium will not receive a premium credit as the minimum premium is required to cover expenses and premium reductions would not be possible within the constraints of our filed rating plans.
The Hanover will communicate to policyholders receiving the automatic premium credit via a letter with details about the credit for the applicable policies. Our local team can provide you with a list of customers receiving the automatic premium credit by July 10, in advance of the letter being distributed on or shortly after July 15..
We ask you to continue to work with your customer to assess the impact to their operations and adjust policies with variable rating exposures, as needed. We also ask our agents and brokers with agency bill accounts with The Hanover to make arrangements to apply the automatic premium credits and credits related to the variable rating exposure changes which will be applied by The Hanover to your agency’s account, to reflect premium credit’s application to the accounts of the impacted insureds.
Customers eligible for automatic premium credit are those with commercial auto, general liability rated on non-variable rating exposures and professional liability coverage on an occurrence basis that were in-force during the credit period March 16 through May 31, 2020, with locations in the state of California. The Hanover will identify the class with the largest premium on the policy as the predominant class to determine if it is variable or non-variable to determine eligibility. A few examples of common non-variable exposures are square footage, number of units, number of members, number or students. These fixed exposures are commonly found in many of our real estate, educational institutions or human services accounts.
The credit will be applied to the total premium for California risk locations of all classes on each qualifying policy. The Hanover will apply a premium credit of 10% of monthly premiums for the period of March 16 through May 31, 2020. For example, for an annual auto premium of $1,200, the monthly premium would be $100. The total credit would be $25 ($5 in March, $10 in April and $10 in May). Additional fees, such as billing, are not considered part of the premium and will not be included as part of the credit calculation.
Eligible customers with an active policy at the end of May will be automatically credited by the end of July.
To make this as easy as possible, eligible customers on direct bill will automatically receive the credit. No action is required.
- Customers who receive a direct bill will see a COVID Credit on their next billing statement. They will be able to view their refund amount on My Hanover Policy once it has been credited to their policy.
- Customers who have paid in full and do not have an account balance on any of their policies with us will receive a refund in early August. If they have other Hanover policies with a payment due, we will apply their credit to these balances first.
- Those who pay by electronic funds transfer (EFT) will receive a credit to their monthly withdrawal in August.
- Customers with a remaining balance on their policies will receive a credit to their balance owed.
- For agency bill policies we will process the credit and issue a refund check to the agent’s billing account by the end of July. We will ask agents to process the credit to the customers’ outstanding balance and issue a refund for customers who have paid in full.
Policies need to be inforce at the time of the adjustment.
Automatic premium credits for qualifying policies will not impact agency commissions, profit sharing or loss ratio.