USAA Chapter 2 Test Questions with Complete Solutions

USAA Chapter 2 Test Questions with Complete Solutions Agent - Answer-One who recieves the authority to act on behalf of someone else. What does it mean that the agent has authrotity to bind? - Answer-The agent should take the utmost care with his words and actions because the insurer may have to live with the agents decisions and mistakes. What are the three major responsibilities of contracted agents? - Answer-Adhree to or follow the contract, use resonable judgement and care at all times. provide all necessary information and documentation to the insurer. What are the three types of authority granted in agency relationships? - Answer- Express, Implied, and Apparent Express Authority - Answer-Authority that is directly granted to the agent in writing via the agent's contract. With this authority an agent is able to write policies on behalf of the insurer, to collect premiums, and to cancel insurance polices. Implied Authority - Answer-The authrority that the public resonably believes the agent to have, based on the agent's representations. Becuase an agent portrays himself as a representative of the insurer, anything the agent says or does is implied to be the action of the insurer. Apparent Authority - Answer-Indirect authority that is granted when the insurer does not correct its agent, even though the agent may be acting in error. Typically granted when the insurer does not act or by not correctring the agent, the insurer implies consent. Insurers employ four types of sales agents: - Answer-Independent insurance Sales Agent, Exclusive Agent, General Agent, and Direct Writer Independent Sales Agent - Answer-A self-employed and able to represent and offer insurance products from more than one company at the same time. Exclusive Agent - Answer-Also known as Captive Agent, he is paid on a commisioned basis, he represents one insurer at a time and provides quotes and policies from only that company. General Agent - Answer-Works for only one company. He trains and supervises the exclusive agents for that company. Direct Writer - Answer-Similare to an Exclusive Agent in that she works for only one company. selling insurance directly to customers. Paid on a salaried/. Sales Agents Four Important Duties: - Answer-Sell insurance polcies, service policyholders contracts, collect the premiums, represent the insurer. Claimant - Answer-An individual or business that makes a claim for a payment after a loss occurs. Must believe loss is covered by an insurance policy, must prove the loss to the insurer and if loss is covered the insurer will indemnify claimant. The Claim Function - Answer-The part of the insurance contract that lets the insurer fulfill its promises to the insured. The two main goals are comply with the terms of the contract, and support the insurer's financial stability. Adjuster must get claimnants the indemnity they deserve and protect the insurer from fraud. Adjusting - Answer-The process of comparing a claimant's losses to the promises made in an insurance policy. Insurance Adjuster - Answer-An agent who processes insuarance claims for a salary, a fee, or commision. Who does the adjuster work for? - Answer-An insurer, a private company, an adjusting company, or the claimant. They can also work for the insured or the insurer Staff Adjusters - Answer-work as salaried employees for only one insurer, They can work keither locally., regionally or nationally. Also known as "company" adjusters, typically work for state farm, nationwide, etc. Indepedent Adjuster - Answer-They are self-employed. Working as contractors for insurers and claims-handling companoies. They may even handle claims for multiple companies. Processes claims for compensation. They charge on a fee-plus-expenses basis for each claim they handle. Some are even paid commision. Public Adjuster - Answer-Hired by the claimany, and not the insurer. Typically work on commission, and limited to only 10% of the settlement. They can help ensure an accurate and fair evalulation of their loses, they specialize in apprasing and negotiating claims. Emergency Adjuster - Answer-Individuals who are temporaily lincensed to handle claims after natural disasters or other castatrophes. Typically required to obtain a licensed quickly, for said disaster, and can only work on the disaster for which they are llicensed. Insurance Adjuster Responsibility: - Answer-Acts as the Fiduciary Agent, has the power to bind, must Report to the principal. Fiduicary Agent - Answer-An insurance adjuster acts as a on behalf of the principal. Which is usually the insurer gives the adjuster the authority to act on its behalf. In order to be a agent, an adjuster must: Have authority granted by an insurer via a contract. Act for, and on behalf of the insurer protect the principals financial and property interests Fiduciary Agent Responsibilities - Answer-Always act in the principals best interest with utmost good faith. Never act with self interest