What must be done if the prior insurance carrier is not an LIS participant?

The requirement for a 3-year letter of experience before binding insurance when the prior insurance carrier is not an LIS (Limited Insurance Services) participant is essential for ensuring that the new insurance provider has a comprehensive understanding of the risk being assumed. This documentation serves as proof of the insured’s prior coverage history, claims experience, and underwriting details. It helps the new insurer evaluate the risk more accurately and determine appropriate coverage terms and premiums.

This is particularly important in the manufactured home sector, where the history of the prior policy can significantly influence the underwriting criteria given the unique risks associated with these homes. By requiring a 3-year letter of experience, insurers can mitigate potential adverse selection and ensure they are basing their decisions on detailed and relevant historical data.

In contrast, options that propose shorter duration letters or no documentation at all would not provide sufficient clarity and detail to justify the risks involved, potentially exposing insurers to unforeseen liabilities.