Rewrites

Business overview of rewrites

A rewrite is a policy transaction that creates a new policy from an existing policy. This is typically because a modification is needed that is too significant to capture as a policy change. Beyond that, there is no industry definition of what might require a rewrite. Different insurers use rewrites in different ways. For example:

• Some insurers may use rewrites to correct an error that occurred during the initial submission of the policy. The policy does not reflect the original intent of the policy, and the policyholder wants a new set of policy documents that reflect the original intent.
• Some insurers may limit reinstatements to be used only when the canceled policy will be put back in force without a gap in coverage. These insurers use rewrites for situations where a canceled policy must be put back in force with a gap in coverage.

Insurers can also use rewrites to transfer a policy from one account to another. This is known as an account rewrite. In this situation, the original policy under the original account is canceled. The rewrite creates a new policy based on the original policy but for a different account. For example, suppose there is an account for a household with two parents and a daughter. There are two personal auto policies - one for the parents and one for the daughter. The daughter is now an adult and wants to move the policy to her own account. To do this, the insurer cancels the daughter's original policy and rewrites the policy to a new account in her name.

Rewrites are usually categorized as one of the following types:

• Full-term - The rewrite replaces the entire term of the original policy. Typically, the original policy is canceled as a flat cancellation. The effective date of the rewrite is usually the same as the effective date of the original policy.
• Mid-term - The rewrite replaces a portion of the original term of the original policy. Typically, the original policy is canceled as a mid-term cancellation. The effective date of the rewrite is on or after the effective date of the cancellation. The rewrite may have an expiration date equal to the original policy's expiration date. Alternatively, the rewrite may last for an entire new term and have an expiration date later than the original policy's expiration date.