If you’re not a legal mind, then insurance underwriting may seem like a vague process that can only be understood by those with the relevant training. However, insurance underwriting is actually very important to both our personal and professional lives as it impacts upon areas such as health care, car insurance coverage and corporate liability. Those unused to translating legal jargon shouldn’t worry. This guide will break down the process of insurance underwriting.
What is Insurance Underwriting?
If you purchase any kind of insurance, the firm that offers it will need to assess what kind of risk you or your business represents. Insurance underwriting is the process of evaluating this risk and determining what kind of coverage a new client should receive. Insurance companies determine how much to charge you for your insurance by using the recommendations of insurance underwriters. The underwriters will also advise insurers whether or not they should accept a new client, due to the individual risk attached to them. The services of insurance underwriters are used to protect insurance companies from clients who pose too much of a risk and could cause the company to lose money.
The Process of Insurance Underwriting
As the client, it is your responsibility to provide relevant evidence to the insurance company. The insurance underwriters will study this evidence and decide whether or not you should be offered coverage. For example, if you have a pre-existing health condition, it’s likely that your insurance premium will be set higher as you present a greater risk to the company. The evidence will usually include your medical records, your age and occupation. If you’re looking for car insurance, then your driving record and the service history on your vehicle will be requested as evidence. Your premium will be significantly higher if you have previously committed driving offences or if you are 25 and under.
Behind the Scenes
If you’re applying for personal or business insurance, then you will usually deal with insurance brokers and agents, rather than the insurance underwriters themselves. However, if you want more of an insight into the process, choose a firm that specialises in insurance underwriting. It’s advisable to seek out a firm that will find creative solutions to the risk you or your business represents and wishes to build a long-lasting relationship with you as the client. For more information, contact a specialist firm that boasts a team of highly qualified underwriters, like Caitlin USA.