Term
| State the role of the broker in the insurance process. |
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Definition
| The role of the agent or broker in the insurance process is to act as the intermediary between the client (insured) and the insurer. |
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Term
| What is the primary duty owed by brokers to clients? |
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Definition
| To ensure that the client receives the right insurance advice and coverage(s). |
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Term
| What is the primary duty owed by the broker to the insurer? |
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Definition
| To tell the truth about the risks they submit; not withold or conceal important information. |
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Term
| What is the most common cause of errors and omissions claims? |
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Definition
Inadequate coverage. These claims are the result of:
- failure to advise clients of exclusions
- failure to place coverage or placing it too late
- providing incorrect coverage
- incorrect advice as to availability of coverages
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Term
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Definition
| Employees of insurance companies. Not involved in selling insurance directly to consumers; not required to be licensed. |
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Term
| State the primary role of underwriters. |
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Definition
| To select the those risks likely to be most profitable for the insurer. |
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Term
| Identify three sources of information used by underwriters when making decisions regarding the suitability of a risk. |
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Definition
- The application
- The broker
- Loss experience data
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Term
| What is a Physical Hazard? |
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Definition
Conditions relating to the premises which may cause a peril to occur. Can include;
- Type of building construction
- Occupancy
- Housekeeping
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Term
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Definition
Are subjective characteristics of the applicant that could cause a peril to occur. Can include;
- Financial condition (health)
- Moral character
- Indifferenc to loss
Example: People experiencing financial difficulty are more likely to commit insurance fraud than those that are not. |
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Term
| Identify two steps normally taken when a loss occurs. |
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Definition
- Insured reports claim to broker.
- Brokerage reports claim to insurer
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Term
| What is the difference between "Company Adjusters" & "Independent Adjusters"? |
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Definition
| Company adjusters are employed by insurance companies. When company adjusters are not available,or particular expertise is required, the insurance company may contract the services of an independent adjusting firm. |
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