ACE Customer Relations & Service 3 — Questions and Answers
Question 1: A commercial client's policy is about to cancel for non-payment. What is the BEST customer service approach?
- Allow the policy to cancel and notify the client after cancellation
- Contact the client proactively before the cancellation date to discuss payment options (Correct answer)
- Report the non-payment to the state insurance department
- Immediately write a new policy with a different carrier
Correct answer: Contact the client proactively before the cancellation date to discuss payment options
Proactive outreach before cancellation demonstrates good faith and gives the client an opportunity to resolve the issue before losing coverage.
Question 2: Which ACORD form is used to report basic property and casualty insurance information for a new applicant?
- ACORD 25 - Certificate of Liability Insurance
- ACORD 125 - Commercial Insurance Application (Correct answer)
- ACORD 80 - Homeowners Application
- ACORD 36 - Binder
Correct answer: ACORD 125 - Commercial Insurance Application
ACORD 125 is the standard Commercial Insurance Application used to capture general applicant information for commercial P&C policies.
Question 3: A customer requests copies of all their policy documents. Under most state regulations, how quickly must an agency respond?
- Within 24 hours regardless of circumstances
- Within a reasonable timeframe, often 10-15 business days as defined by state law (Correct answer)
- Only at annual renewal
- Within 5 years of the request
Correct answer: Within a reasonable timeframe, often 10-15 business days as defined by state law
Most states require insurers and agents to provide policy documents within a reasonable period, typically defined by state regulation as 10-15 business days.
Question 4: What is the primary purpose of an 'Additional Insured' endorsement from a customer service perspective?
- To reduce the primary insured's premium by sharing coverage costs
- To extend liability protection to a third party who has a business relationship with the named insured (Correct answer)
- To provide the additional insured with their own separate policy limits
- To allow the additional insured to make changes to the primary policy
Correct answer: To extend liability protection to a third party who has a business relationship with the named insured
An Additional Insured endorsement extends the primary policy's liability protection to a specified third party, often required by contract.
Question 5: A customer is confused about the difference between their deductible and out-of-pocket maximum on their health plan. Which explanation is CORRECT?
- They are the same thing with different names
- The deductible is what you pay before insurance kicks in; the out-of-pocket maximum is the most you'll pay in a year (Correct answer)
- The out-of-pocket maximum applies only to prescription drugs
- The deductible resets monthly while the out-of-pocket maximum resets annually
Correct answer: The deductible is what you pay before insurance kicks in; the out-of-pocket maximum is the most you'll pay in a year
The deductible is the initial amount paid before insurance coverage begins, while the out-of-pocket maximum caps total annual patient cost-sharing.
Question 6: When handling a customer complaint, which documentation practice is MOST important?
- Record only the resolution, not the initial complaint
- Document all interactions including dates, times, persons involved, and agreed-upon actions (Correct answer)
- File the complaint only if it escalates to a regulatory body
- Keep documentation for no more than one year
Correct answer: Document all interactions including dates, times, persons involved, and agreed-upon actions
Complete documentation of all complaint interactions creates an accurate record that protects both the customer and the agency.
Question 7: A customer has a Personal Auto Policy and recently got married. What coverage consideration should be discussed?
- The policy automatically covers the new spouse with no action needed
- The new spouse and any vehicles they own should be added to the policy (Correct answer)
- A separate policy must be purchased for the new spouse by law
- Marriage has no effect on auto insurance coverage
Correct answer: The new spouse and any vehicles they own should be added to the policy
A change in household composition like marriage typically requires updating the policy to add the new spouse and any additional vehicles to ensure proper coverage.
ACE Customer Relations & Service 3
A commercial client's policy is about to cancel for non-payment.
What is the BEST customer service approach?