Industry Insights

Non-Standard Auto Insurance: Navigating Complexity with Technology

Non-standard auto insurance runs at a pace and complexity that breaks ordinary systems. SpeedBuilder Systems designed BindExpress for NSA operations because we understood the chaos.

Non-standard auto insurance has always attracted a specific kind of carrier: one willing to underwrite drivers with DUIs, violations, coverage gaps, and credit problems in exchange for higher premiums. The segment is growing, and the economics can work. But many carriers underestimate how different the operational reality is from standard auto business.

Every policy cycle presents the challenges of proration calculations, high instances of short payments, cancellations, reinstatements, and delivering state-specific forms that can vary wildly across jurisdictions. SR-22 filings demand precise timing and coverage lapses create compliance exposure.

None of these problems are over powering on their own, but stacked together, they can overwhelm traditional policy administration systems that were never designed for this kind of volume or variability.

And that’s precisely why, for carriers committed to the non-standard auto insurance market, purpose-built technology is the only way forward.

The Complexities of the NSA (High-Risk Auto) Segment

Non-standard auto insurance operates like a completely different business wearing standard auto’s clothes. Both involve cars and coverage, but that’s where the similarities end.

Accurate, Reliable Information

Driving information for the NSA driver can change every six months, making the ability to obtain accurate and reliable information about the status of drivers licenses, violation details, and even those living in the customers’ homes critical. Every renewal brings another round of information verification, underwriting based on those findings, and rate calculations built on current risk – leaving many legacy systems struggling to communicate with outside sources to obtain reliable information and automatically assess and rate risk.

Special Forms and SR-22 Filings

High-risk drivers need specialized policy forms with endorsements explicitly designed for their situations. Each state has its own requirements. Different risk profiles can require different endorsements. Managing multiple form variations across multiple jurisdictions is cumbersome and time consuming; selecting a wrong form could trigger compliance violations.

Underwriters and agents are burdened with the responsibility of tracking which forms apply in which circumstances. This complexity compounds exponentially when operating across state lines.

Adding to the difficulty are SR-22 filings – proof of financial responsibility required by state Departments of Motor Vehicles for many NSA customers. These filings are not only a necessity at policy issuance, but just as importantly, require immediate notification to state authorities if the insured’s coverage lapses for any reason, placing regulatory responsibility on insurers and inconveniencing underwriters and agents who face a long list of “to do” items for coverage cancellations. NSA lapses trigger cascading workflows that touch multiple departments and external agencies, a reality that many policy administration systems are not designed to support.

The Need for Specialized Features

Given all these operational demands, insurers and MGAs need tools and specific system capabilities, including three important features to properly support non-standard auto business.

Flexible Commission Calculations

NSA distribution looks nothing like standard auto’s neat agent hierarchies. NSA participants include sub-producers, aggregators, direct writers, and more – all with different commission arrangements. Some agents may receive base plus volume bonus commission while other agents may operate on sliding scale tiers. Still others may negotiate a retroactive adjustments (based on loss ratio) commission structure.

This complexity is multiplied by hundreds of agents writing six-month policies that generate commission events monthly. Non-standard auto insurers and agents need policy administration systems designed specifically to support coverage-based, flat dollar, and fully-earned commission calculations across multiple agency hierarchies.

Flexible Billing and Payment Plans

In addition to flexible commission structures, NSA insurers and agents need policy administration systems that support specialized billing and payment plans directly tied to policy information. Non-standard auto insurance, by design, typically requires more creative billing and collection methods than those in the standard auto insurance arena. NSA billing systems must offer direct bill, agency bill, and premium finance at a minimum, while supporting equity calculations to reduce non-payment cancellations and equity shortfalls.

Likewise, NSA customers require flexible payment plans, including a monthly option, and the ability to pay premiums 24×7 through nearly any format: check, debit and credit card, electronic funds transfer (EFT), and even vendors such as ApplePay, CashApp, and Venmo. These same customers also expect to know the payment schedule and amount due for each future installment transaction.

Bind-to-the-Minute Issuance

The non-standard auto arena necessitates “checks and balances” in policy issuance. Uninsured drivers who had an accident in the morning must be prevented from obtaining coverage effective at 12:01am that same day. This means that every step in a policy transaction – from quoting, to obtaining the insured’s signature, to binding and issuance – must be tracked and time-stamped down to the minute to prevent fraud.

This same time-stamped information must be readily available to the claims team for evaluating reported losses. Access to policy details including supporting documents (SR-22, signed application, and so on) and underwriting notes must be instantaneous and easily accessible for claim personnel.

How SpeedBuilder’s NSA Expertise Positions Us In the Marketplace

At SpeedBuilder Systems, we built our BindExpress platform to address the specific challenges facing non-standard auto insurers and MGAs – and more.

Every quote, every policy issuance, every SR-22 filing, and the unique commission and billing structures required to support these, flow through one unified system. And because BindExpress is a total solution, policy data is readily shared and available for billing, claims, and reporting.

Access to Information: BindExpress boasts integrations with more than fifty (50) third-party softwares making access to information such as MVRs, CLUE, credit reports, VIN sources, and cost estimating available at any point in the process.
SR-22 Handling: Our platform treats SR-22 filings as standard workflow elements. Files get sent to state authorities automatically and policy lapses trigger appropriate notifications. Underwriters focus on writing business instead of managing DMV paperwork.
Commission Calculations That Match Reality: BindExpress calculates complex commission structures including multi-tier splits, retroactive adjustments, and volume bonuses without manual intervention from accounting teams.
Flexible Billing and Payment Plans: BindExpress provides the standard agency bill, direct bill, and premium finance options along with our own Hybrid Billing – a blend of due date and equity date calculations. All are configurable through the system’s Configuration Toolkit, which offers over 4,000 configuration options “out of the box.”
Regulatory Updates Without Disruption: AlwaysCurrent™ Architecture allows new system enhancements to be added at the convenience of our clients without breaking client-specific modifications. NSA state requirement changes flow through without disrupting client specific business rules and workflows.
Non-Standard Automobile Binding: Designed to meet the legal and regulatory mandates of the non-standard auto market, BindExpress tracks and memorializes each transaction in the policy cycle. Quotes, signatures, issuances, and payments are time-stamped down to the minute to prevent fraud.
Built for Scale: SpeedBuilder Systems focuses on small and medium carriers and MGAs who need enterprise-level capabilities at reasonable costs. We understand the specific challenges in the non-standard auto market and we built our platform accordingly.

Software Shouldn't Be the Enemy

Non-standard auto insurance runs at a pace and complexity that breaks ordinary systems. SpeedBuilder Systems designed BindExpress for NSA operations because we understood the chaos. Bind-to-the-minute capabilities, automated SR-22 handling, and a flexible commission engine tackle the exact problems plaguing the NSA market. Carriers and MGAs trust us with their book of business because we’ve been in the trenches alongside them.

Contact SpeedBuilder Systems today to learn more.

How to Scale an Insurance Business with Tech and Talent

Rapid Insurance Product Launches: Time-to-Market Strategies for Insurance Executives

Get in Touch with Our Experts

Ready to transform your insurance operations? Our team is here to help you implement cutting-edge solutions that drive results.

Why Choose SpeedBuilder Systems?

Ready to Get Started?

Schedule a personalized demo of the BindExpress Suite and see how it can transform your insurance operations.

Call us: 803-227-0225

Speed Builder Systems focuses on software tools and technologies that help our insurance clients grow sales, speed up collections, streamline claims handling, and improve underwriting results.

Quick Links