Understanding the Insurance Submission Lifecycle

The insurance submission lifecycle includes all the key steps that happen from the moment a customer requests coverage to the time the invoice is sent. Here’s how it flows:

1. Quote

What it is: A quote is an estimate of the insurance premium based on the customer’s details (risk, coverage, limits, etc.).
Purpose: To give the client an idea of cost and coverage options.
Generated by: Agent, broker, or insurer via a rating engine or manual underwriter input.

2. Proposal

What it is: A formal proposal includes detailed terms, coverage specifics, and pricing. It may come with supporting documents.
Purpose: To present a clear offer to the insured for review and approval.
Includes: Deductibles, exclusions, limits, endorsements, and payment options.

3. Binder

What it is: A binder serves as a temporary insurance agreement that offers proof of coverage until the official policy is issued.
Purpose: To bind coverage quickly while the formalities are being finalized.
Issued by: Agent or carrier once the proposal is accepted.

4. Finance Submission / Finance Request

What it is: A finance submission is used when the client opts for premium financing.
Purpose: To request a third-party financing company to cover the premium on the client’s behalf (common in commercial policies).
Includes: Payment terms, down payment details, and installment structure.

5. Finance Agreement

What it is: A legally binding contract between the insured and the finance company that outlines the terms and conditions of the premium financing arrangement.
Purpose: To ensure both parties agree to the repayment terms before the policy becomes active.

6. Policy

What it is: The policy is the final and official document that clearly states what is covered, what’s not, and all the rules of the insurance.
Purpose: It legally binds the insurer to provide coverage as agreed.
Includes: All finalized coverage terms, conditions, forms, and endorsements.

7. Invoice