Chapter 8 Flashcards
What is an application in insurance?
is a request for insurance that introduces the applicant to the insurance company, recognizes the broker of record, and identifies the insurer to whom the request for coverage is directed.
Who might apply for insurance?
include those with issues with their current insurer, first-time insureds, those seeking alternative quotes, individuals evaluating other agents or brokers, those needing additional coverage, or those whose circumstances no longer align with their current broker.
What is the basic application process in insurance?
provide information about themselves and their insurance needs through an online form or discussions with a broker. The intermediary asks questions to understand the applicant’s needs and collect relevant information.
What is the duty of disclosure in insurance?
requires applicants to disclose all material facts accurately and uphold utmost good faith when making oral or written applications.
What is a misrepresentation in the context of insurance applications?
involves giving false information knowingly, which could lead to denied claims or voided policies.
Why is note-taking critical during oral insurance applications?
ensures there is a clear record of the transaction, minimizing misunderstandings and documenting material facts shared during the conversation.
What are the benefits of a written insurance application?
provide consistent information gathering, eliminate transcription errors, improve customer service, document legal requirements, and offer proof of the questions asked and answers provided.
What role do CSIO forms play in insurance applications?
CSIO forms are standardized application forms that streamline the collection of information and are widely accepted by insurers for various types of coverage.
What is the effective date of a policy?
The effective date is when coverage begins, often starting at the time the application is made.
What is the subject of insurance?
The subject of insurance is the item or liability being insured, such as a home, vehicle, business property, or legal responsibility.
Who is a loss payee?
a party other than the insured entitled to insurance proceeds due to an insurable interest in the property.
What is a mortgage clause in insurance?
protects the interests of a mortgagee when a loss is denied due to the insured’s actions, provided the mortgagee was unaware of the wrongful action.
Why is prior loss history important in insurance applications?
helps underwriters evaluate risk, determine coverage terms, and predict future losses based on past claims.
What information about prior insurance is required in applications?
must provide prior insurers’ names, policy numbers, and policy expiry dates, which help verify loss history and assess risks.
What is the agent’s and broker’s report in insurance applications?
an opportunity for agents and brokers to provide additional information about clients, advocate for their risks, and highlight special considerations.
How does AI impact the insurance application process?
enables online insurance applications, automates queries through chatbots, and offers on-demand insurance coverage with customizable options.
Why is the named insured critical in insurance applications?
must have an insurable interest and be a legal entity, ensuring they can benefit financially from the policy and meet contractual obligations.
What is the importance of the mailing address in an application?
required for legal notices, such as cancellations, and ensures proper communication between the insurer and the insured.
