State Auto's Premium Audit Philosophy

At State Auto, we are committed to producing audits that result in premium levels that are appropriate to your actual business operations, in accordance with your policy provisions. 

The most commonly asked questions regarding State Auto’s premium audit process are below.

 

FAQs

Q: Why does my premium need to be audited?

  • When your insurance policy was issued, your premium was calculated based on estimates of your business risk exposures. These exposures can be variable over the course of your policy term and may include items such as payroll, sales, receipts, or costs depending on the policy coverages selected. These estimates are part of the application your agent submitted to us in order to calculate the initial premium. Before the end of your policy term, we may need to determine the actual amount of these exposures by conducting a premium audit. The size of your business and/or the nature of your business operations will determine whether an audit needs to be performed.

 

Q: What lines of business are auditable at State Auto?

  • Business Auto
  • Businessowners
  • General Liability
  • Workers' Compensation

 

Q: When will the premium audit be conducted?

  • If it is determined that an audit is needed, the audit will be done within 90 days after the expiration date of your policy term. The audit is performed according to the conditions stated in your policy and in compliance with state and industry rules. Upon completion of the audit, a final premium is calculated and reported to you on a statement of audit.

 

Q: What if the audited premium is more or less than the estimated premium? 

  • If the estimated premium is less than the audited premium, you will receive a bill. 
  • If the estimated premium is more than the audited premium, you will receive a refund. 
  • For pay-as-you-go options, the annual audited premium based on the final audit will be reduced by the amount billed throughout the policy term. Any overpayment will be refunded and any underpayment will be billed. 

 

Q: What type of audit should I expect?

  • The size of your business and/or the nature of your business operations will determine the type of audit that will be performed or whether an audit may be waived. All policies participating in Pay-As-You-Go* are subject to a final audit. 
  • There are three types of audits: 
  1. Physical
  2. Telephone
  3. Mail

 

1. Physical Audit

This type of audit is performed at your place of business or at your accountant's location usually within 90 days after the expiration date of your policy term. The audit will be done by an auditor authorized by State Auto. The auditor will notify you of the audit appointment by mail, email or phone. This notification will list the insurance policies that will be audited and the records needed. It is important to immediately notify the auditor if you have questions about the records the auditor will examine or if you need to reschedule the appointment date.

2. Telephone Audit

Sometimes an auditor authorized by State Auto will contact you or your accountant to perform the audit over the phone. The auditor may ask you to send certain documents to us in order to complete the audit process.

3. Mail Audit

Within a few days of the expiration of your policy term, you may receive an audit form by mail. It should be completed and returned promptly. The form will ask for specific information depending on your policy and indicate the type of information you should report. Questions can be directed to your agent or the contact provided in the audit letter. 

 

*Pay-As-You-Go is currently only available for our Workers’ Compensation policies.

 

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