What An Underwriter Does
- 1. What An UnderwriterDoes Insurance isbasedon risk.Whenyougetan insurance policy,the insurance companyistakingon some of your risk.For example,if youdrive acar, you have a riskthat your car will be damagedinan accident.Havingauto insurance meansthatif the car doesgetdamaged,the insurance companywill pay forthe repairs.Byhavinga policy,yourriskislower. The insurance companymakesupfor the riskit takeson bycharging premiumsandsetting deductibles.If acompanychargestoo little,itcouldgobankruptwhenlarge claimsare filed.Butif a companychargestoo much,it will lose businesstoitscompetition. An underwriter’sjobistomake sure that the insurance chargesjustthe rightamount forthe coverage itprovides.Theyfigure howmuchriskyourepresent,how muchcoverage the company can offeryou,and howmuchthat coverage shouldcost. WhyInsurance UnderwritingIs Important Insurance companieswanttostaycompetitive andstayopenforbusiness soitmakessense why underwritingisimportanttothem. But whyis itimportantto you?Because whenyou’re applyingforaninsurance policy,your applicationisgoingtobe lookedoverbyan underwriter.Andthatunderwriter’sopinionisgoingto determine howmuchyoupayforinsurance.Andbasedonthe conditionof yourhealthor evena mistake onyourapplication theycoulddecide todenyyourapplicationentirely. No bigdeal youcan alwaysapplywitha differentcompany,right?Actually,itisn’tthateasy. Like almosteverythingelse these days,applyingforinsurance leavesarecord.Andif you getdenied coverage,itwill showupinthat record.Once you’ve beendeniedcoverageatone company,other companiesare more likelytodenyyou,too. So whatcan youdo?It isn’tlike youcan call up a company’sunderwriterandpleadyourcase.But your insurance agentcan.
- 2. WorkingWithAn Agent Many insurance agentsrepresentseveral insurance companies.Theyhave asense of whatkindsof riskseach one iswillingtotake on.Whenyouworkwithan agent,theycan steeryoutoward the companiesthatare most likelytoacceptyouat their“preferredrates”meaningyougetthe most savings. Andmany agentshave professional relationshipswiththe underwritersatthe companiesthey represent.Thatmeanstheycan“shop quietly.”Theycancontact those underwritersandwithout formallyapplyinggetanideaof whetheryourapplicationwouldbe accepted,andwhatratesyou’d qualifyfor. That's justone of the reasons whyworkingwithanagentis a good idea. To get matchedwithagentslicensedinyourarea,fill outthisshortform.You'll getfree insurance quotesfromprofessional agents,withnoobligationtobuyanything.