Broker of Record letter: Take Control of Your Trucking Insurance

Thinking about switching insurance brokers? A Broker of Record (BOR) letter lets you take control of your coverage and ensure you have the best representation. In commercial auto insurance, this document helps businesses secure better coverage and pricing. Timely execution and strategic broker selection can impact cost-efficiency and risk management.

This article explains the purpose of a BOR letter, how it works, and what transportation companies should consider to secure the best coverage while staying in control.

What Is a Broker of Record Letter?

A BOR letter is a formal authorization designating a broker as the exclusive representative for securing insurance coverage. In simpler terms, it reassigns the right to communicate, negotiate, and bind coverage with an insurance company from the current broker to the newly designated broker.

Once the BOR letter is in effect, insurers typically recognize only the appointed broker as authorized to manage and discuss the policy details, quotes, and underwriting decisions.

Why Does It Matter for Commercial Auto Insurance?

In commercial auto lines, particularly for trucking and transportation businesses, coverage needs can be complex. Insurers look at various factors such as vehicle type, cargo, driving records, and state regulations. Brokers specializing in this sector may approach multiple insurance companies to find comprehensive and cost-effective coverage that meets federal and state requirements for semi-trucks, box trucks, cargo vans, and more.

However, as underwriters do not want to process duplicate quote requests, the first broker to submit your risk to a carrier is typically granted the exclusive right to negotiate. If a second broker attempts to contact the same carrier afterward, that broker is often “blocked” from obtaining a quote. This competitive structure frequently leads to the suggestion of a BOR letter so the newly appointed broker can step in and pick up where the old broker left off.

When and Why Might You Sign a BOR Letter?

Businesses consider signing a BOR letter under several circumstances:

1. Dissatisfaction with Current Broker

If your existing broker’s service levels, communication, or coverage recommendations have proven inadequate, signing a BOR letter formally ends that relationship and allows you to bring in a more capable representative.

2. Desire for Specialized Expertise

Commercial auto insurance requires specialized underwriting. A broker experienced in your industry can better advocate for your needs.

3. Locked-Out Markets

You may find that all available markets have already been approached by your incumbent broker. If you want another broker to access those markets, a BOR letter can remove the “blocked” status and open the door to alternative proposals.

4. Potential Cost Savings

While the same insurer may not automatically offer a lower quote just because a new broker is involved, a more proactive or specialized broker could package risk data and negotiate pricing more effectively.

How the BOR Letter Process Works

After signing a BOR letter, your new broker notifies insurers, and the previous broker has five days to respond. You typically have five days to confirm or rescind the transfer. If confirmed, the insurer stops working with the former broker.

A BOR letter won’t trigger new quotes if the insurer has already issued final pricing. Only major underwriting changes, like improved safety records or adjusted vehicle use, may lead to revised terms.

Avoiding Common Pitfalls

Unclear Intent

Signing a BOR letter without fully understanding the repercussions can create confusion. Always have the new broker and, if possible, your existing broker clarify the details before you proceed.

Surprise Notification

Carriers often alert your incumbent broker once they receive the BOR letter. If you are not expecting that call, you may find yourself in an awkward discussion about why you changed brokers.

Limited Market Options

Even with a BOR letter, a newly appointed broker might not yield better results if the carrier has already declined your application or proposed a rate you find unsatisfactory. In some cases, a different carrier altogether might be a better fit.

Aligning with the Right Insurance Partner

A BOR letter is one step toward securing effective commercial auto coverage. To keep your fleet running, minimize downtime, and control costs, choose an insurer that understands your operational risks. A company specializing in commercial auto with fast underwriting decisions can help you get the right policy quickly. Look for broad coverage across multiple states to ensure comprehensive protection for your business.

GIA Group is a trusted partner in navigating the complexities of trucking insurance. A comprehensive list of the insurers we work with is available on our homepage. Let us help you find the best coverage tailored to your needs, contact us today!

Final Thoughts

Before signing a Broker of Record letter, assess its impact on your current relationships, market access, and costs. Communicate clearly with your existing broker, the new broker, and the insurer to prevent misunderstandings. If your goal is to optimize commercial auto coverage for your business, start by selecting a broker who offers proven expertise in your specific class of operations and who can collaborate effectively with your preferred insurers.

A BOR letter isn’t just paperwork — it’s your key to better coverage, stronger broker representation, and cost-effective insurance solutions. Before signing, choose a broker who understands your industry and fights for your best interests.