What Is SIR (Self-Insured Retention)?
A self-insured retention (SIR) is a dollar threshold the insured must pay, and typically administer, on each loss before the insurance policy responds at all, unlike a deductible where the carrier handles the claim from dollar one and collects the deductible back.
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A self-insured retention (SIR) is a dollar threshold the insured must pay, and typically administer, on each loss before the insurance policy responds at all, unlike a deductible where the carrier handles the claim from dollar one and collects the deductible back.
SIR (Self-Insured Retention) explained
The practical difference from a deductible is who runs the claim. Under a deductible, the carrier adjusts and pays from the first dollar, then recovers the deductible from the insured. Under an SIR, the insured funds and usually manages losses inside the retention, the policy and its duty to defend engage only above the threshold.
SIRs appear on larger commercial accounts, umbrella and excess programs, and sophisticated risks that want premium credit for keeping predictable losses in-house. For producers, an SIR conversation is a signal of buyer sophistication: the prospect is thinking in total cost of risk, not premium alone, and the sale becomes a risk-financing design conversation rather than a rate quote. Mid-market accounts moving up from guaranteed-cost programs are the classic moment this enters the picture.
Why it matters when you're buying
Recognizing when an account is SIR-ready lets a producer sell structure instead of price, which is one of the few conversations where an independent agency can differentiate on expertise rather than markets.
Frequently Asked Questions
What is the difference between an SIR and a deductible?
Who typically carries an SIR?
Why do carriers offer SIR structures?
How does an SIR change the producer conversation?
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