We all know that the process of completing applications is not the most stimulating activity. The applications can range from a simple one page supplemental to 30+ pages of questions with extra information such as financial reporting and loss information. Different personalities have distinctive traits so if you are prone to be easily distracted or as KOLBE defines as a “quick start” the monotonous process may be more of a challenge for you so be sure to pay extra attention!
While a lot of the information may seem unnecessary, over the top or in excess, it is all extremely important for the insurance company to properly identify the risk and appropriately underwrite. The companies have extremely intricate rating factors that are affected in multiple ways.
It is essential to maintain exact records and correct information in all applications that you are working on. Misinformation can come back to bite the policy-holder at the worst possible time – after a claim.
After a claim, if it is determined that a misrepresentation on the application has occurred the insurance company can rescind coverage – even if the policy holder was unaware or such situation. A misrepresentation as defined by Wikipedia:
Misrepresentation is a contract law concept. It means a false statement of fact made by one party to another party, which has the effect of inducing that party into the contract.
If you are uncertain about any question on an application, ask the question. While a cliché, it’s entirely appropriate: “It’s better to be safe than sorry!”