Statement of No Loss (ACORD 37): What You Are Signing

If a policy lapsed and the carrier will not reinstate it until you sign something, that document is almost certainly a statement of no loss. It is a short form with serious consequences, and it is worth understanding before you sign it.

What is a statement of no loss, and is it the same as a no loss letter or ACORD 37?

A statement of no loss is a signed certification from the insured that no accident, damage, claim, or incident that could lead to a claim occurred during a specific window of time. That window is usually the gap between the date coverage was cancelled and the date the carrier would reinstate it.

The industry standard version is ACORD 37, titled Statement of No Loss. Some carriers use their own version instead. The name varies as well, and you may see it called a no loss letter or a no known loss letter. The function is the same in each case.

When does a carrier ask for a no loss letter?

The most common trigger is a cancellation for nonpayment, followed by a request to reinstate. A missed payment, a card that expired, or an invoice that went to the wrong address can all produce a short gap that has to be closed before coverage resumes.

Carriers may also ask for one when a renewal is processed after the expiration date, when a new policy is backdated to fill a gap, or when coverage was delayed for another reason. In each case the carrier is asking you to confirm that nothing happened while it was not on the risk.

What are you certifying when you sign the form?

The two dates on the form matter more than anything else. They define the period you are certifying was loss free. Read them carefully, because a date entered incorrectly changes what you are attesting to.

The certification generally extends beyond filed claims. It typically covers accidents, damage, injuries, and circumstances that might reasonably lead to a claim later, whether or not anyone has reported anything yet. A cracked pipe you noticed but have not dealt with, or a customer who slipped and said they were fine, may fall inside that language.

The named insured normally signs. Some carriers also want a witness signature or a certification from the agency.

What if something did happen during the gap?

Then the form should not be signed. If a loss happened during the lapse, the carrier may decline reinstatement, re-underwrite the risk, or offer terms that differ from the original policy. That is an unwelcome outcome, but it is a survivable one.

Signing the form when a loss did occur is a much worse position. A carrier that later discovers an undisclosed loss may rescind the reinstated policy, treat it as though it never existed, and deny claims made against it. Depending on the circumstances, it may also be treated as insurance fraud. If you are unsure whether something counts, that uncertainty is worth raising before you sign rather than after.

Does signing a statement of no loss guarantee reinstatement?

A signed statement of no loss supports a reinstatement request. It does not compel one. Some carriers decline reinstatement after a lapse of a certain length, and some will not reinstate at all once a policy has cancelled. Others require the outstanding premium to accompany the form, and a request sent without payment may simply be rejected.

Turnaround varies as well. Some reinstatements are processed the same day, and others sit with an underwriter for several days. During that period there is generally no coverage in force, which is worth planning around rather than assuming.

Why can a lapse cost more than the gap itself?

In California, the consequences of a lapse often extend past the policy. A contractor may have licensing or contract obligations tied to continuous coverage. A commercial lease or a loan agreement may require evidence of insurance without interruption. A lapse in auto coverage can create separate issues with the Department of Motor Vehicles.

On many lines, prior lapses can affect how a risk is priced later, since applications commonly ask about continuous coverage. Personal auto in California is an exception, because Proposition 103 does not allow the absence of prior coverage, on its own, to determine eligibility or premium. In a market where options are already limited, a gap in the record is worth avoiding where it can be avoided.

Rating rules under Proposition 103 and the Vehicle Code minimums are revised from time to time. The figures here are as published at the time of writing, and the Department of Insurance and the Legislative Counsel publish the current versions.

How do you keep a lapse from happening?

Most lapses we see are administrative rather than financial. A card on file expires, an invoice goes to an old address, a renewal notice reaches someone who no longer handles it, or a policy quietly changes billing method. Reviewing who receives billing notices, and confirming the address on file after any move or staffing change, closes most of that risk.

Can I download a fillable ACORD 37 here?

No. ACORD forms are licensed documents, and the carrier that asked for your statement supplies the version it wants signed, whether that is ACORD 37 or its own form. We do not host copies. Copies found on unofficial websites are often out of date, and a carrier can reject an outdated form. If you are a client of ours, we prepare it with you. If you are not, ask the carrier that requested it.

Do you need help with a statement of no loss?

If a carrier has asked you for a statement of no loss, we can walk through what the form covers and help you work out whether anything in the gap needs to be disclosed. We can also explain what the carrier is likely to do next. Where a loss did occur, we can talk through the options that remain. The decision about what to certify is yours, and it should be made with a clear view of what the language means.

This is general information about a common insurance document and is not legal advice.

Already a client of ours?

Send us your policy number and the dates the carrier is asking about, and we prepare the statement with you. Use the form below and answer Yes to the first question.

Not a client, and your carrier has asked for one?

Your own carrier supplies the form it wants signed, and only that carrier can reinstate the policy. If you would rather replace the policy than be reinstated by a carrier that cancelled it, start a quote and we tell you up front which kind of placement it is. Some risks we can write directly and quickly. Others go to underwriting for approval, or need a wholesale market, and those take longer. Either way you know before you decide. Business policies start at the business insurance quote.

Disclaimer

This article is provided by Schneiderman Insurance Agency for general informational purposes only. It is not legal, tax, financial, claims, or coverage advice. We are licensed insurance professionals, not attorneys, accountants, or financial advisors, and nothing here should be relied on as a substitute for advice from a qualified professional in those fields. This content is general in nature and is not a review of, or a recommendation for, any individual reader’s specific insurance needs, policies, or circumstances. Insurance coverage depends entirely on the specific terms, conditions, endorsements, exclusions, limits, underwriting eligibility, carrier, and facts of each situation, and the actual policy language always controls. We do not guarantee any coverage, pricing, eligibility, underwriting approval, or claim outcome. Reading this article does not create an agent-client relationship. To understand how these issues apply to your situation, please review your own policy and speak with a licensed insurance professional, and consult legal, tax, or financial advisors where appropriate.