Long Term Agreements
Long Term Agreements Save you money! Or do they?….A long term agreement or LTA as it is often known, is an agreement you can enter into with your insurers which allows a discount in return for you agreeing to stay with the same insurer for a set period of time, usually 3 years. So whats wrong with this? If you have a bad year (a number of claims), insurers can often “get out” of the agreement. If you obtain a more competitive quotation elsewhere, you cannot get out of the agreement! The discount you usually receive for being in an LTA is around 5 to 10%. It is considered in the current market, not a good idea to enter into a contract as many insurers are fighting for business and if you sign up for an LTA you will be locking yourself in. When the agreement ends, if the market is “hardening” (rates are increasing) you will be at the mercy of the market! If you do want to get out of the agreement before it is ended, depending on the insurer, you will have to pay the discount back for each year, thus increasing your insurance expenditure. Many insurers are offering LTA’s. Before you agree, ask yourself: – Do I really want to be locked into a 3 or 5 year policy? – If I have problems with the insurer and want to terminate the agreement, do I really want to pay a premium to do this? Remember, insurance is only as good as the last claim….. To discuss any of the points raised or if you have any queries call David Walton at Bromwall on 01707 894402 or email us on email@example.com or check our commercial combined insurance page here
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