ACORD 125 Policy Information Section

How to Complete the ACORD 125 Policy Information Section

The Policy Information Section includes the following inputs:

PROPOSED EFF DATE: The proposed effective date of the policy or policies. The effective date is the date the policy coverage begins or "goes in force". If the policies your are requesting for this insured have multiple effective dates, you should complete a separate ACORD 125 for each policy with a different effective date.

Enter the dates in this numeric format - MM/DD/YYYY. Example: 07/01/2014 for July 1, 2014

PROPOSED EXP DATE: The proposed expiration date of the policy or policies. This is the date the policy ends and the coverage will need to be replaced by either a renewal policy with this carrier or a new policy with a different carrier.

Enter the dates in this numeric format - MM/DD/YYYY. Example: 07/01/2014 for July 1, 2014

BILLING PLAN: A policy cannot be both Direct Bill and Agency Bill.

DIRECT: This is direct bill. Direct bill is when the insurance carrier bills the customer directly. This means the carrier is responsible for collecting the premium payments, not the agency.

AGENCY: This is agency bill. Agency bill is when the agency - you - are responsible for collecting the premiums on these policies.

Agency bill also means your agency has an account current with this insurance carrier. You collect the premiums and at some later date - maybe 30, 45 or 60 days later - your agency sends payment, less commission, to the insurance carrier.

PAYMENT PLAN: Some insurance carriers offer payment plan options such as quarterly billing or monthly billing. If you are asking your carrier to quote or issue the policy with one of these options enter that here.

METHOD OF PAYMENT: Will the customer be paying with check, electronic check, credit card, etc.  You will only need to enter this if the policy is Direct Bill. If the policy is agency bill the underwriter will not care about this.

AUDIT: Many commercial policies are audited by the insurance carrier after the end of the policy period. Since many policy premiums are based on sales estimates, this is done so the insurance carrier can end up charging for the actual exposure during the policy period. Audits can result in a refund or an additional premium due.

If your customer is growing fast or shrinking fast, it is a good idea for you to talk to your customer and adjust the estimated numbers during the policy period.

DEPOSIT: This is the dollar amount that you are sending to the insurance carrier so they will issue the policy.

This may be a space you leave blank until you have a quote.

MINIMUM PREMIUM: Most commercial policies have a minimum premium that is charged for small accounts. You will leave this blank. The underwriter giving you a quote will fill this in.

POLICY PREMIUM: This is also a space you will leave blank. Unless you are rating and issuing the policy yourself, the underwriter will fill this in when they provide a quote or issue the policy.

I hope this helps you learn how to complete the policy information section of the ACORD 125 commercial insurance application.

Taking a few minutes each day to learn is a great way to build your insurance knowledge over time.

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