If you don’t have evidence that you mailed an important document, how can you defend yourself during a dispute? Proof of mail was already a smart idea for insurance companies, but new state laws are making it a legal requirement. Proof of mail outsourcing is an easy and cost-effective way of making sure you always have the documentation you need.
What Is Proof of Mail – And Why Does It Matter for Insurers?
States typically require insurers to provide notice before taking certain actions, such as canceling or non-renewing a policy. For example, insurers issuing workers’ compensation, employer’s liability, property, or casualty insurance in Florida must provide a minimum of 45 days’ advance written notice before renewal or nonrenewal of a policy. If they cancel a policy, there is a minimum of 10 days’ notice for cancelation due to nonpayment and a minimum of 20 days’ notice for other permissible reasons. If insurers do not provide proper notice, coverage remains active for 45 days until after they provide notice or until the policyholder finds replacement coverage.
What happens if a policyholder claims to never have received notice but the insurer says they sent notice? Without documentation, it’s the policyholder’s word against the insurer’s word. If the policyholder files a complaint, the burden of proof will likely be on the insurer, who could be held liable for failing to send – or for failing to prove that they’ve sent – the legally-required notification.
To show compliance with state notification laws, insurers need to show proof of mail. This refers to documentation proving that a letter was mailed. There are different ways to go about this, including some options that provide proof that the insurer sent the mail and others that provide proof that the policyholder received the mail. For example:
- Certificate of Mailing provides evidence that you sent an item on a specific date. You should retain the Certificate of Mailing receipt to prove that the USPS accepted an item. However, the Certificate of Mailing does not prove that the recipient ever received the item. It’s also important to note that the USPS does not keep copies of the receipt, meaning you’ll need to maintain it for your own records. Use PS Form 3817 for domestic and international shipments with one or two items, PS Form 3665 for three or more items, and PS Form 3606 for a Certificate of Bulk Mailing for items of identical weight.
- Certified Mail provides you with a receipt that confirms when you sent an item and requires the recipient to provide a signature. This service is available combined with Return Receipt Service, which means you receive proof of signature – either by mail or electronically.
In-House Proof of Mail: Pros and Cons
For insurers, the question isn’t whether you need proof of mail – it’s how you’ll obtain it. In-house proof of mail is one option, which has both advantages and disadvantages.
- Pros: Handling proof of mail in-house means you have full control of the process. You’ll have complete visibility into every step, helping you to maintain quality control. You can also hire a dedicated employee who is 100% focused on ensuring your proof of mail is executed as planned.
- Cons: When you handle proof of mail in-house, you incur high fixed costs even when mail volume is low. Plus, scaling is difficult and may require hiring additional staff and buying more equipment. This is also a resource-intensive process. If you’re not ready to take it on, the risk of human error may be high.
The Hidden Challenges of Managing Proof of Mail In-House
Even after weighing the pros and cons, some insurers attempt to handle proof of mailing requirements in-house, but they soon discover than it can be even more challenging than it first appears. Here are some common pitfalls:
- It’s easy to underestimate the regulatory complexity and documentation burden of proof of mail. Many insurers operate in multiple states, each of which has its own set of laws with different timelines for non-renewals, cancellations, and claim determinations and other important communications. Furthermore, state laws are constantly changing and subject to court interpretation.
- Managing proof of mail involves creating an entirely new process. Without a streamlined system in place, insurers often find themselves dealing with manual workflows and inconsistent audit trails, which increases the risk of non-compliance with notification deadlines.
- There are unexpected costs. The equipment you need may be expensive. Plus, postage and paper costs may add up. There’s also the human element – you’ll need to allocate workers to focus on proof of mail instead of on your core insurance processes.
When you put it all together, proof of mail may become a major drain on your resources.
The Case for Proof of Mail Outsourcing
Proof of mail outsourcing offers an alternative to in-house mail compliance for insurers. Once again, there are both pros and cons to consider.
- Pros: When you outsource proof of mail, you gain the expertise of a dedicated team with the experience and systems needed for a reliable, cost-effective process. This should result in better tracking and reporting as well as volume pricing and scalability during peak periods.
- Cons: Outsourcing is only as a good as the vendor you select. When you go this route, you need to consider vendor management and oversight. If you’re switching from in-house to outsourcing, you also need to think about change management strategies to minimize the disruption.
Outsourcing vs. In-House: Key Considerations for Insurance Leaders
Whether an insurer is better off handling proof of mail requirements in-house or via outsourcing comes down to the insurer’s needs.
Outsourcing may be the better option if you:
- Don’t have the in-house resources needed to handle proof of mail effectively. This includes space, equipment, and staffing.
- Are likely to see a fluctuating mail volume and are concerned about wasting resources when volume is low or not being able to keep up when it’s high.
- Operate in many different states, each with different requirements.
- Lack experience in proof of mail and are worried about errors and non-compliance.
- Could allocate resources to proof of mail but would rather focus those resources on activities that support your company’s growth.
- Already outsource insurance print and mail services. If you’re already outsourcing insurance document delivery solutions, adding on proof of mail makes sense.
How Covenir Makes Proof of Mail Seamless for Insurers
As a company dedicated to meeting the unique needs of the insurance industry, Covenir offers secure, reliable print and mail services for insurers. Our virtual mail room and automated print services mean we can guarantee we’ll deliver your documents on time, every time. Our Covenir IntelliMail Advantage solution for proof of mail provides a transparent, end-to-end audit trail.
Insurance customers consistently report that Convenir’s proof of mail service is a cost-effective solution that results in savings of at least 1% – sometimes more – while freeing up resources and reducing the risk of human error.
“I highly recommend Covenir’s print mail services,” says Khristian Estrada, Product Manager, Policy Administration System, at FIGO. “The Covenir team is proactive and staffed by great people!”
Proof of mail is a compliance-critical workflow that deserves the expertise of an experienced team. If you can’t provide that, consider partnering with a provider who can.
Find out more about Covenir’s print and distribution services for proof of mail.