The Adjuster and Underwriting

A Video Explaining the Obligations of an Adjuster to the Underwriting of Insurance

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djusters are the representatives of the insurers who fulfill the promises made by the underwriter when the risk was taken and a policy was issued. The adjuster (sometimes called a claims representative) must determine that the decision to insure was based upon accurate facts and that the underwriter fully understood the risk he or she was taking.

The work of the underwriter begins with the submission of an application from a prospective insured, directly or by an agent or broker. The underwriter reviews the application and either presents an offer to insure or a refusal to insurer.

The underwriter is obligated by tradition and the history of the insurance industry to believe that the applicant reports facts to the underwriter honestly and in good faith. By considering that the applicant is dealing with the underwriter fairly and in good faith the underwriter is able to be confident in the evaluation of the risk presented. The application presented to an underwriter, either directly or via an agent or broker, is a request for an offer of insurance. Acting on the understanding that the applicant is acting in good faith the underwriter can weigh the hazards faced by a particular property, individual or business before agreeing to take on the risk of loss and make an offer of insurance. After completing a review of the application and all facts available to the underwriter from other sources and his or her experience will either issue an offer of insurance or a refusal to insure.

Underwriters take information from adjusters, after a loss, to reevaluate the risk decision, to be certain they were not deceived and to better evaluate the risk taken so they can deal with future requests for renewal or increases in coverages fairly and in good faith.

Sometimes an insurer will ask an adjuster to perform a pre-risk inspection to determine if the risk is worthy before the underwriter makes the decision to accept a risk for insurance. Underwriters also use the services of inspection companies and engineers to inspect the property or the risk before making a decision to offer or refuse to offer insurance.

Usually, however, information from the adjuster is provided to help the underwriter determine whether to cancel, non-renew, or continue on the risk, or modify the policy and premium before agreeing to continue on the risk on the same terms and conditions or modify terms, conditions and premium amount.

© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 53 years Barry Zalma has dedicated 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 make it possible for insurers and their claims staff to become insurance claims professionals.

Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL 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