General Insurance Quesitions

General Insurance Questions

What are the types of questions that I will need to answer during my insurance application and why are these questions being asked of me by insurers?

When you are applying for an insurance policy, you need to answer certain questions that inform the insurer of your liability risk. An agent may ask your address, age, and other basic questions. The insurer uses the answers to these questions to determine the potential risks to them. For example if you have a less than perfect driving record, the auto insurance company may make certain decisions based on this fact.

The information you provide will be used for two primary purposes.

The first purpose is that the insurance company will make a decision based upon the answers to their questions. They will decide whether you fit the profile of the type of customer they are looking for. Some insurers specialize in high risk applicants and have specific products available for them while others prefer only safe and traditional applications. The second purpose is that the insurer will then determine what rate will be charged to you based on your credit risk. The whole process is referred to as the underwriting process. This process is used to determine whether or not insurance coverage will be provided to the applicant.

If the insurer decides to extend coverage, they will then determine whether the rate will be high or low based on the relative risk. High risk applicants generally pay more than low risk.

What do I lose by not using an agent to buy insurance?

If you don’t make use of an agent, then the policyholder is not able to receive any personalized service. When there is direct contact with an agent, they are able to assist with the purchasing process as well as during the filing of a claim.