An underwriter will have to follow certain guidelines which are set out by the company for which they work. These guidelines will reflect the companies policy on the risks which they are prepared to take regarding the risks and the types of people they are permitted to insure. Underwriter will, therefore, look at each application for insurance which is filed with their company and assess its risk. They will look at the type of house which the residents wish to insure, whether they have a no claims bonus etc. and will use this information to see whether the insurance company will be able to insure them.
If they decide to insure them, the underwriter will need to decide how large a premium they will charge for the cover. Underwriters will have a great deal of information and statistics on how the type of house or the type of person relates to how likely they are to make a claim. Underwriters carry a great deal of responsibility within the company, which customers should bare in mind when they are applying for a coverage policy. If the customer makes a mistake in the application form and the underwriter considers that this
means that the customer is more likely to act irresponsibly and burn down their house, they may give the customer a higher premium.
Currently, the rules for underwriting are so complex that many companies use computer systems which automatically check whether a certain customer should be granted a policy and whether the cost of the premiums which should be charged. This reduces the time which it takes for the underwriting process to take place. It also means that the underwriters can take a great deal of information into account when they are making their decisions.
Overall, underwriters are a hugely important part of the insurance process, as it is on them that the responsibility for accepting or declining coverage falls. Therefore, customers should make sure that they take into consideration the underwriting process remembering that a person will carefully look over their application to see whether it should be agreed, and as such should do there best to make a reasonable and sensible insurance application. By doing their best, customers will be able to make an application which is most likely to be accepted by the company, meaning that they will be able to access good coverage for their dwelling.