At Frankenmuth Insurance, we strive to provide quality insurance protection at a fair price. One way we ensure a fair price is by performing an audit.  Audits measure the insured’s actual exposure to loss.   An audit may be required at the end of the policy term whether cancelled, non-renewed, or expired.

An audit is necessary and important for several reasons.

1.    Audit data is included in rate making decisions and loss ratio computation. Ultimately, impacting agency profitability.

2.    The audit provides an up to date assessment of the insured’s operation and provides Underwriting with data to assist your agency in competitive renewal pricing.

3.    The audit can also be a useful tool in providing agencies with accurate information regarding changes in locations, operations, legal entity, owner/officer status, employee count, and types of labor used.

The agency can make the audit process more efficient for all of the parties involved by: 

1.    Advising insureds their policy is written subject to audit. Each new business and renewal declaration contains a Subject to Audit form. This form can be utilized to educate your insured’s.

2.    Obtaining the audit contact (i.e. accountant’s name and phone number) and informing insured’s on the type of records and information needed at the time audit.

3.    Advising insureds on the importance of recordkeeping and the rules and classifications specific to their type of risk.

To assist your agency with this communication, check out our Premium Audit Guide in Rule & Rate. The document contains informative audit information and explains the process in more detail.