2-A The Agent and Authority

Adjusters Apparent Authority

-Adjuster pays the claimant too much for the loss amount -Insurer ignores the mistake and issues check -Apparent authority is granted -Claimant typically will not be required to pay back

Agent's Apparent Authority

-Agent's contract forbids the agent from selling insurance on exotic cars -Agent sells insurance for exotic car anyway -Insurer ignores the mistake and cashes the check -Apparent Authority is granted

Exclusive Agent

-Also called captive agent -Commissioned -Represents only one insurer and only their policies

Direct Writer

-Salaried Employee -Works for only one company

Independent Insurance Sales Agent

-Self employed -Offer insurance from more than one company at the same time -They can compare and give rate quotes from different companies -Find a policy that best suits the customer

Sales Agent's day-to-day activities

-Sell insurance policies -Service policyholders contracts -Collect the premiums -represent the insurer

General Agent

-Works for one insurance company -Supervises other exclusive agents -Trains other agents

The Four Types of Sales Agents

1. Independent Insurance Sales Agent 2. Exclusive Agent 3. General Agent 4. Direct Writer

3 Types of Authority

1.. Express Authority 2. Implied Authority 3. Apparent Authority

Authority

Agents receive authority by written contract Sales agent: Contracted to sell and service insurance policies on behalf of the insurer Adjusters: Contracted to settle claims that arise against the insurer

Power to Bind

An agent's authority can bind -What the agent says or does can bind the insurer -Agents should take the utmost care in what they say and do -Even if the agent makes mistakes, the insurer may have to accept them

Express Authority

Authority that is directly granted to the agent in writing via the agents contract Agents usually have express authority to: -Sell policies -Collect premiums -Issue Binders -Offer Discounts -Cancel insurance

Apparent Authority

Indirect authority that is granted when the insurer does not correct its agent, even though the agent may be acting in error -Granted when the insurer does not act -By not correcting the agent, the insurer implies consetnt

Agent

One who receives the authority to act on behalf of someone else Sales Agent: Receives authority to sell Insurance Adjuster: receives authority to settle claims brought against the insurer

Implied Authority

The authority that the public reasonably believes the agent to have, based on the agent's representations Including - Portraying oneself as a representative -Wearing a name tag with company logo -Handing out company business cards -Words and actions that go 'hand in hand" with express authority and are usual in order to perform an agents duties

Responsibilities (3)

Three major responsibilities of contracted agents 1. Adhere to or follow the contract 2. Use reasonable judgement and care 3. Provide all necessary information and documentation