An agency has a client who pays inconsistently, files fictitious claims, fails to report new drivers and puts off audits, among other dishonest behaviors. The agent asks the insurer to non-renew on renewal due to claims, but the company can only do so on one policy, not all of them.

Q: "How can we get rid of customers like this? Can we refuse the client but offer to refer them to another agency as their agent of record if they want to continue using the same insurer? If this is possible, how can we go about it?"

A: “This is a very common question, and the Big ‘I’ Virtual University (VU) has several articles with tips you might find helpful. See below.

If you have evidence of fictitious claims and other dishonest or illegal actions, you can—with advice from counsel—consider reporting this to the insurance department. A felony insurance fraud indictment is likely to evoke a pretty swift behavioral change.

I don't understand the non-renewal problem. An insurer can usually non-renew a policy for any reason other than something, for example, that is discriminatory or otherwise illegal. Midterm cancellations typically require a contractual or statutory basis, but that’s not the case for non-renewals. If the insurer is aware of this situation, I can't imagine why it would want to retain this insured.

Check out the following VU articles for additional information on this topic:

• ‘Increase Profits by Getting Rid of Customers’ by Chris Burand outlines three types of customers and why losing a few of them isn’t necessarily a bad thing.
• ‘Increase Profits by Getting Rid of Prospects’ by Chris Burand discusses the ways businesses segment their prospective clients and how serving specific groups—rather than just anyone—can increase profitability.
• ‘Increase Service by Reducing Customers’ by Al Diamond asks a series of questions regarding your treatment of customers and puts you in the shoes of one who is displeased.
• ‘How to Fire a Customer’ by the VU faculty answers another agent’s question regarding their obligation to keep problem customers from an E&O and management perspective.
• ‘Getting Rid of Abusive Customers’ by the VU faculty offers specific steps to take when you want to resign as someone’s agent, and how the process may be easier for commercial rather than personal lines.”

Bill Wilson is director of the Big “I” Virtual University.

This question was originally submitted by an agent through the VU’s Ask an Expert Service. Answers to other coverage questions are available on the VU website. If you need help accessing the website, email logon@iiaba.net to request login information.