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Acquisition of the insurance | Zalma about insurance



See the full video at https://rumble.com/vpohte-acquisition-of-the-policy.html and at https://youtu.be/OrKrMIemM58

The person who buys an insurance may only acquire insurance from an insurer through one of three methods:

By meeting with an agent for the insurer

The agent is a person appointed by the insurer to conduct insurance business with and on behalf of the insurer. The representative usually has the right to bind insurance in the insurer's name without first obtaining permission from the insurer. The prospective insured presents his needs to the agent who either accepts or rejects the proposed insurance. If accepted, the prospective insured is immediately an insured by the insurer.

California Insurance Code Section 31 defines an insurance agent as an "insurance agent" means a person authorized, by and on behalf of an insurer, to carry out all classes of insurance other than life insurance. , invalidity or health insurance, on behalf of an assumed insurance company. ”

By trading with a broker

An insurance broker is a person who takes out insurance with, but not on behalf of, an insurer. The broker's only duty is to the prospective insured, so he or she buys for the widest coverage available at the lowest possible price. The broker can not bind an insurer without first obtaining a written commitment to insure the potential insured.

California Insurance Code Section 33 defines the term as follows: "" Insurance broker "means a person who, for compensation and on behalf of another person, signs insurance other than life, disability or health with, but not on behalf of, an insurer. ”

Through A Direct Writer.

Some insurance companies, known as direct writers, refuse to deal with agents or brokers. receive insurance proposals directly from a prospective insured who will speak – usually by telephone – with an employee of the insurer who has the authority to accept a certain risk.

The agent is reimbursed only by a commission from the insurer. the insurer plus a fee charged by the client's policyholder, insurance applicant or insurer

The direct clerk pays the salary of the person who meets (usually by telephone) with a prospective insured and can accept certain risks directly or with permission from the insurer's underwriting department.

In simple language, the agent takes out insurance with a prospective insured on behalf of an insurer while the broker takes out insurance with but not on behalf of an insurer and only represents prospective insured.

I Superior Dispatch, Inc. v. Insurance Corp. of New York 181 Cal. App. 4th 175 (2010), the California Court of Appeal concluded that:

Representations in an insurance application prepared by an insurance broker on behalf of an insured are attributed to the insured by law. (LA Sound USA, Inc. v. St. Paul Fire & Marine Ins. Co. (2007) 156 Cal.App.4th 1259, 1268.)

Insureds are therefore responsible for all statements made on their behalf by brokers who are their agents as opposed to agents of insurers. When a broker prepares an application for insurance, it is therefore absolutely necessary for the prospective insured to carefully examine the application in order to verify the accuracy of the information provided in it. Otherwise, the insured risks that insurers may try to invalidate the coverage if there is a misrepresentation or concealment of a material fact from the broker. On the other hand, information known to the agent – even if it has not been transferred to the insurer – is considered to be known to the insurer.

The Underwriter

The person who makes the decision to insure or not to insure a prospective insured. , in modern practice, is called an underwriter. Unlike the original insurers at Lloyd & # 39 ;s who invested their own money in the insurance policy, the person with the title "insurer" in modern American insurance is usually an employee of an insurer who was hired to evaluate risks that the insurer's employer is willing. to take.

The agent or broker deals directly with the insurer's insurer or an agent appointed by the insurer to act as the insurer. The agent and the broker try to present the risk to the insurer and the insurer that is best suited for the risk.

The underwriter is the risk taker. With Lloyd & # 39 ;s, the insurer risks its own funds. In modern insurance company practice, the insurer is the person who risks the money with the insurer for which he or she works.

The underwriter determines whether the risk presented by the broker or agent is the type of risk that the insurer is willing to take. Every insurer has specialized insurers who look at risks in different ways and different risks and use their own criteria to evaluate them.

The Loss Prevention Engineer

If the risk suggested by the prospective insured is high, he or she will often to be visited by a loss prevention engineer. This person, employed by the insurer, is obliged to inspect the prospective insured's real and personal property and interview him or her to make sure that the insured and the property meet the requirements set by the insurer before accepting a risk for insurance. The risk inspection often takes place after the insurance has been agreed, but within 60 days of entry, so if the risk does not meet the requirements, the insurance can in practice be canceled.

The Pre-risk Inspection Service

the insurer will have it inspected by a specialized company called a "pre-risk inspection service". Its inspectors are often experienced claims settlers who understand the types of dangers that potential policyholders and their prospective insurers face. The pre-risk inspection service seeks approximately the same information for the insurer as the injury prevention engineer. In addition, it determines if there is any specialized information that the insurer needs due to the type of risk. likewise, the inspection of a convenience store will differ from the inspection of an antique shop or jewelry store.

The service for pre-risk inspection is versatile and involves much more active participation from the prospective insured than the injury prevention engineer does. Once it has completed its inspection, as with an injury prevention engineer, it recommends changes to the insurer. The insured will usually be required to make these changes as a condition of coverage before the insurance takes effect.

The key to analyzing each claim made to an insurer requires an analysis of the acquisition of the insurance, the representations made by the insurer. to obtain the insurance and the insurance approved by the insurer.


© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to the position of insurance consultant specializing in insurance coverage, insurance claims handling, bad faith and insurance fraud almost equally for insurers and policyholders.

He also acts as an intermediary or arbitrator. insurance-related disputes. He practiced law in California for more than 44 years as a lawyer for insurance coverage and claims management and more than 54 years in the insurance industry.

Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.

He is available at http://www.zalma.com and zalma@zalma.com. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award. For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claimants to become professionals in insurance claims.

Go to training available at https://claimschool.com; articles at https://zalma.substack.com, the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Zalma on Twitter at https://twitter.com/bzalma ; Go to Barry Zalma videos at https://www.rumble.com/zalma; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ T the last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud- letter -2 / podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4


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