The Nature of Underwriting

Every Claims Professional Must Understand Underwriting

Posted on August 29, 2023 by Barry Zalma

Before the insurance claims adjuster begins a claims investigation he or she must understand the nature of underwriting because it is how an insurance policy comes into existence. With knowledge of how an insurance policy comes into existence a claims person has the basic information needed to properly investigate the origin of a policy and how that applies to the investigation of a claim.

Underwriting is defined as the process of accepting or rejecting risks. It requires a determination by the underwriter of the risks for which insurance is sought and the terms under which the insurance will be written if the risk is acceptable. Underwriting insurance is a function unique to the insurance industry which transfers the risk of loss from the person or entity insured to the insurer.