Could You Be Impacted by Post Claim Underwriting?
Have you ever heard of post claim underwriting? You may be impacted by it, but don’t know it yet.
View this Marketplace video, or continue reading below.
Let’s start from the beginning. Underwriting is the process an insurance company does to analyze the risk an individual presents. The professional who does underwriting–called an underwriter–reviews applications for coverage and accepts or rejects an applicant based on risk analysis. For example, for life insurance, the underwriter will analyze your health records.
The underwriting process is usually completed before your insurance policy is issued.
Post-claim underwriting happens, just as it says, after the claim. The insurance company only goes through the underwriting process after a claim is made. Any inconsistency found between the records and the forms used to apply for the coverage could make the claim invalid. And inconsistencies are not hard to find since most creditor insurance application forms in this case are carefully designed to do so: the questions are vague and not clear, and prone to inaccuracies. Unfortunately, a simple mistake on these forms can be considered fraud and the consumers are held responsible for the information provided. So, in the end, the coverage you thought you had (and paid for) never existed and the insurance provider will claim it’s your fault.
It’s not an illegal practice in the majority of provinces, and can be an unpleasant surprise. One of the ways of making sure your coverage is valid and has been underwritten before purchase is to obtain your insurance through a licensed insurance broker. The broker can arrange a pre- purchase underwritten contract, so you ensure you have coverage prior to even purchasing the product. A licensed broker can help you understand the clauses of the coverage and, once you’ve been approved, the coverage is guaranteed.
We, at Connolly Group, can help find the best insurance for you and your family, and make sure your coverage is valid and guaranteed. Visit Assumption Life’s Better Mortgage Insurance to learn how you can protect yourself.