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When I started my career in the Business of Insurance there were very few computers. Most things were done by way of the telephone or through the use of the mail and a variety of small delivery systems. Most insurance companies invested in the delivery systems to help their companies quickly review applications and agree to cover an insurance risk.
Insurance agents needed to get the information correct right from the start, and they needed to spend time with the person needing insurance in order to help them make decisions about the kinds of insurance they might need. Everything was done with Math.
Insurance agents had huge volumes of manuals which listed all the rules, loopholes, possible problems that added a number for a discount or surcharge of the rates charged based on every statistical possibility there was for a problem or a solved problem. Every little tiny detail meant something either an added cost or a discounted cost. The application was therefore the most important part of the insurance process.
Back in the days before instant communication an Insurance agent had to understand the business of insurance well enough that he could do “Field Underwriting” and try to place the insurance customer in the correct coverage with the correct discounts and surcharges. It was painful to quote anyone any kind of insurance.
In that era is was almost necessary for an insurance agent to invest some amount of time face to face with his or her customers. During this period it was common for an insurance agent to spend evening after evening meeting with customers in their homes, and showing the customers what insurance products might help them reduce their exposure to risks.
When a customer completes the insurance application the information provided must be correct. Any failure to mention a speeding ticket 2 years ago would completely change the results of the premium an agent determined the company would charge to offer an insurance contract. Customers always seem to forget something, or fail to remember something else.
With the advancement of technology the errors on Insurance Applications have been reduced. Primarily due to the way it has simplified the field underwriting an Insurance Agent is required to do, but also because there is more instant access to the needed records to verify the information on the application.
It’s important to realize that insurance is based on accurate information, and anything discovered after the initial application may result in increased premium or cancellation of coverage completely. It’s important to ask for insurance based on the true situation and with accurate details otherwise new business applications don’t always result in issued insurance contracts.
An insurance customer knows if the company Accepts the application because a Policy Declaration will be issued to the policyholder. The policy declaration and all of it’s attachments is what your insurance premium pays to own.
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- Declaration or Dec Page
- How to Get an Accurate Auto Insurance Quote
- What is “Risk”?
- Your Credit Score
Glossary of Insurance Terms:
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