Underwriting may seem like an obscure occupation to many until the time comes when you need a more specialized insurance policy or you are told your policy is under review.
At those times it’s useful to have some background on this profession. Here’s a quick primer.
The basics of underwriting
Insurance underwriting is the process of evaluating the risk of an insurance policy.
An underwriter sets the premium for a policy by determining what a profitable level would be for taking on that particular risk–or if the insurance company can take on that risk at all. For example for auto insurance, underwriters look at a driver’s age, driving history, credit score, education level and domestic situation.
Policy review
Underwriters typically review a policy when the risk is outside a defined range. Many basic policies simply go through a computer program never to be looked at by a human underwriter but if a policy is unusual or high risk it may be manually reviewed.
Underwriters review certain policies annually, depending on the type of risk and size of potential payout.
Underwriters specialize
Underwriters look at a lot of information, usually using proprietary software to help them make decisions. They are looking for specific information to determine what the actual risk is of writing a policy. They will look at the coverage you are seeking and what perils the insurance company is taking on.
Underwriters typically go through extensive training that helps them to understand risks and how to prevent them. They usually specialize in an insurance area, for example health, auto, or marine.
Can I talk with my underwriter?
The job of an underwriter isn’t to speak with the general public. Their role is to assess risk and determine premiums, and decide whether or not the company can underwrite the policy.
If you have a question about an underwriter’s decision, you should speak with your agent. An underwriter’s decision will usually only change if there is new information. Your broker can advise you on the best way to handle such a situation.
If you need help with understanding an underwriter’s decision or if you’re looking for more information, speak with the experts at John B. Wright Insurance. They can help you make an informed decision on the best type of policy for the risks you face.
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