Standard Obligations About Insurance Certificates

ACORD.org made a super easy to understand in depth information about insurance certificates or generally known as the kinds of certificate of insurance they offer. So what are these and why are these used? According to ACORD.org, these are documents which are distributed by insurance agencies to third party companies (also known as certificate holders/requestors) to give details about its insurance coverage considering these certificates are generally for renewal or to remind about the insurance policy costs decided.



While ACORD forms pertain to fillable forms which utilizes a number of templates for financial services such as the insurance providers, one of the most common template that's used in the program are these insurance certificates. Not all types of these certificates are being used by ACORD but there are several types that have been produced by this organization. There are 8 common types of certificates utilized and these are classified as ACORD 20 (Certificate of Aviation Liability Insurance), 21 (Certificate of Aircraft Insurance), 22 (Intermodal Interchange Certificate of Insurance), 23 (Automobile Certificate of Insurance), 24 (Certificate of Property Insurance), 25 (Certificate of Liability Insurance), 27 (Evidence of Property Insurance) up to and lastly ACORD 28 (Evidence of Commercial Property Insurance).    



Are Insurance Certificates Just Like Policies? They aren't the same. These certificates are not the policies certainly because it is not given to extend, amend, endorse or even be changed in such a way as an insurance policy. Take note that only an amendment or endorsement to the policy can take effect to the changes in insurance policy. And therefore these are only references between the third party and the client regarding the insurance plan issued so it will not offer coverage.



Why are Liability Insurance and Property Insurance Separate ACORD certificates? This is because a property insurance policy is the one that obligates the insurer to give notification to the mortgage holder whenever the policy is likely to be terminated. On the other hand, what a typical liability insurance do is that it obligates the insurer to inform the name of the first insured and nobody else with regards to policy cancellation unless the policy is being recommended to offer notice to another party. This makes ACORD forms to work in separate insurance certificates based on these needs that's been executed by accredited ACORD working groups.



Issues Regarding Old ACORD certificates: If for instance you are an insurance producer and your client asks you to offer them the previous version of insurance certificates, you should also remember that ACORD forms are increasingly being revised and monitored as these are components of regulatory requirements change and so crucial. For that reason, you will have to advise your client that a non-current version of an ACORD form may not comply with the insurance standards for it to be distributed for use. This would then be unsafe for them as it is crucial for ACORD.org to deliver most current certificates as possible. Clients may refer to ACORD.org directly if they will not agree.