Ch.4-The Insurance process Flashcards
1
Q
Agents/Brokers
A
intermediary btwn client and insurer
2
Q
Agents
A
insurers interest
3
Q
brokers
A
- Clients interest
*
4
Q
Errors and ommssions exposure
A
- 50% claims from
- failure to provide proper coverages
- failure to advise client of exclusions
- failure to place coverage/place too late
- mistake in coverage
- not correctly advising of availability of coverages
5
Q
brokers primary duty to client
A
primary duty to client: ensure they get right advice/coverage
if not: erros and ommissions claim
6
Q
brokers primary duty to insurers
A
- that they:
- will tell truth about risks
- wont withhold/conceal important info
7
Q
Underwriters
A
employees of insurance company
- dont sell insurane directly
- not req to be licenced
8
Q
what underwriters do + 4 sources of info
A
- Primary role: select risks likely to be most profitable fo insurer
- information from 4 sources:
- application
- broker
- loss experience data (review past)
- Inspection reports (by field rep’s)
9
Q
Hazard
A
condition which may cause loss
10
Q
2 mkinds of hazards
A
- Physical hazard
- Moral hazard
11
Q
Physical hazards
A
- conditions relating to prem. which may cuse peril
- type of bldg construction
- occupancy
- housekeeping
12
Q
Moral Hazard
A
Subjective characteristics of applicant thay might cause peril
- financial condition of applciant
- moral character of applicant
- Indifference to loss
13
Q
4 decisions underwriters can make about the risk
A
reject risk
OR:
- accept risk- as presented
- accept risk- Increased rate
- Accept risk- Increased deductible
- Accept risk- subject to conditions
14
Q
CLAIMS PROCESS
A
- INSURED REPORTS CLAIM TO BROKERAGE
- BROKERAGE REPORTS CLAIM TO INSURER
15
Q
Claims handling
A
- opening file claim
- Coverage verification
- Submissions to ins co
- handling the claim
- brojerage adjusting vs insurace co adjusting vs independant adj. firms
- Closing claim file
