Most propane submissions that get declined aren’t declined because the account is bad. They’re declined because of a line item nobody flagged on the way in.
Usually, it’s fuel mix.
Propane-specific programs, including PropanePro, are built for retail propane distributors. That sounds simple until you look at a real book of business and realize “propane distributor” can mean a lot of things. Some clients deliver propane and nothing else. Others deliver propane plus a little fuel oil. Others call themselves propane dealers but run a mixed-fuel operation with diesel trucks, gasoline tanks, and a natural gas division.
The difference between the first two and the third is the 15% rule.
What the 15% rule actually says
For a retail propane account to fit PropanePro’s appetite, propane (also known as LPG or liquid petroleum gas) has to be the core of the operation. Butane is also eligible. Incidental amounts of certain other fuels are acceptable, but only up to 15% of total operations.
Eligible as incidental (up to 15%):
- Fuel oil
- Kerosene
Not eligible at any percentage:
- Gasoline and diesel
- Natural gas
- Medical gas, oxygen, hydrogen, helium
- Anhydrous ammonia
- Methanol, ethanol
- Industrial gases (argon, nitrogen, CO2, acetylene, and similar)
If a client’s operation includes any of the items in the second list, it isn’t a fit, regardless of percentage. If it includes fuel oil or kerosene and those stay under 15%, the account is reviewable.
Why submissions get declined before a real look
When an underwriter sees “fuel dealer” on a submission and the operations breakdown includes gasoline, diesel, or natural gas, the file doesn’t get a deep read. It gets declined at intake. The same goes for anything that points to upstream or wholesale operations rather than retail distribution.
Most of this is fixable on the front end by asking two questions before submitting:
- What percentage of the business comes from propane versus everything else?
- Is the “everything else” fuel oil and kerosene, or does it include other fuels or gases?
If the answer to the first is 85% or more propane, and the answer to the second is “just fuel oil and kerosene,” you have a submittable account. If either answer points a different direction, the account likely belongs with a different market.
How to read a client’s operations before submitting
A few quick signals to check:
- Fleet composition. Bobtails and cylinder delivery trucks point to a propane operation. Tanker trucks carrying gasoline or diesel point somewhere else.
- Storage setup. Aboveground propane tanks and a cylinder exchange area look different from underground gasoline tanks or a diesel fueling station.
- Customer base. Residential heat, agricultural accounts, forklift cylinder refills, and restaurants point to retail propane. Fleet fueling or construction site fueling usually points to mixed fuel.
- How the client describes themselves. “Propane company” reads differently from “fuel company.” The language a client uses about their own business often matches where they actually fit in the market.
The short version
Propane-first, retail, with no more than 15% incidental fuel oil or kerosene: submittable.
Anything else: worth a quick conversation before the submission goes in, so nobody’s time gets wasted on a file that was never going to bind.
If you aren’t sure where a client lands, send the operations breakdown over before the full submission. A five-minute appetite check up front beats a declination two weeks later.
A note on PropanePro
For clearly propane-focused clients, PropanePro offers all-lines coverage built specifically for retail propane distributors. With the carrier market tightening in this space, it’s a strong option to have ready for accounts that qualify.
Visit the PropanePro web page today to submit your accounts or speak with an expert.
