Though it is a term many of us will come across when we take out insurance policies, not many of us thoroughly understand precisely what insurance underwriting means. The best advice when taking out any insurance is to arm yourself with as much prior knowledge as possible to ensure you know your position in this contract beforehand. However, the role of an insurance underwriter is often one not openly discussed when it comes to our personal insurance policies.
What is Underwriting All About?
An underwriter will work for the insurance company and use the data available to them when calculating the risks involved when setting the charge premiums accordingly. This is because when each of us takes out an insurance policy, the insurance company is taking a gamble on us. We are asking them to back us and our endeavors and take the risk that we will get through the contract period unscathed! It means, therefore, that underwriting needs to discern whether this risk is worth taking or whether it is just too high, and the insurance company cannot offer you the protection that you require because of your circumstances at that time.
The Steps an Underwriter Will Take
An Underwriter is a fully trained professional who is responsible for:
- Determining any actual risks by accessing the information given to them
- Decide on the policy cover type and set the conditions which the insurance company will agree to insure under
- Act as a negotiator with your agent or broker when your insurance cover is not so clear-cut
- Could restrict or possibly alter your coverage by endorsement
- Can look for future ways of reducing possible insurance claims
Though their role is extensive, customers will never get to see or speak to their insurance company’s Underwriter. All queries are dealt with through the insurance agent or broker.