Insurance Insurance Claims & Underwriting

Question 1

What is the primary role of an insurance underwriter?

Accepted Answer

Evaluating risk and determining whether to offer coverage and at what premium

Answer

Processing and paying claims

Answer

Selling policies directly to consumers

Answer

Investigating fraud on behalf of the insurer

Question 2

What does 'first notice of loss' (FNOL) refer to in the claims process?

Accepted Answer

The initial report made by the insured to the insurer notifying them of a loss

Answer

The final settlement offer made to the claimant

Answer

The underwriter's notice of a new risk

Answer

The premium notice sent before renewal

Question 3

What is the purpose of an 'independent adjuster' in an insurance claim?

Accepted Answer

To investigate and evaluate claims on behalf of the insurer, especially during high-volume events

Answer

To represent the insured in court

Answer

To set the insurer's premium rates

Answer

To audit the insurer's financial statements

Question 4

Which underwriting factor most directly measures the frequency and severity of past claims by an insured?

Accepted Answer

Loss history (loss runs)

Answer

Credit score

Answer

Policy expiration date

Answer

Agent production volume

Question 5

What is a 'proof of loss' document in the insurance claims process?

Accepted Answer

A formal statement signed by the insured documenting the details and amount of their claim

Answer

A court judgment against the insurer

Answer

The adjuster's estimate of repair costs

Answer

The insurer's denial letter

Question 6

What does 'adverse selection' mean in insurance underwriting?

Accepted Answer

High-risk individuals are more likely to seek insurance than low-risk individuals, skewing the risk pool

Answer

The insurer selects only low-risk applicants

Answer

The insured selects the most expensive policy available

Answer

The insurer denies all applicants with prior claims