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

An underwriter assesses the risk presented by an applicant and decides whether to accept it, modify terms, or decline coverage, and sets an appropriate premium.

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

First notice of loss is the initial step in the claims process where the insured contacts the insurer to report that a covered loss has occurred.

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

Independent adjusters are hired by insurers on a contract basis to investigate and settle claims, often used during catastrophes when staff adjusters are overwhelmed.

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

Loss runs are a record of the insured's past claims, showing dates, descriptions, amounts paid, and reserves, which underwriters use to assess future risk.

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 proof of loss is a sworn statement provided by the insured to the insurer that details the nature, cause, and dollar amount of a claim.

Insurance Practice Test

Insurance Practice Test

Insurance Insurance Claims & Underwriting