Explain the following terms as used in insurance. (a) re-insurance (b) Loss adjusters (c) underwriters (d) brokers (e) assessor

Answer Details

Meaning of the terms as used in insurance:

1. Re-insurance: This is an arrangement whereby an insurance company transfers part of the risk it has accepted to another insurance company. It helps to spread risks and protects the insurer from very large losses.
2. Loss adjusters: These are claims specialists appointed by insurance companies to investigate losses, determine the cause and extent of damage, establish whether the insurer is liable and recommend the amount payable as compensation.
3. Underwriters: These are individuals or companies that assess risks proposed for insurance. They decide whether to accept or reject the risk and, where accepted, determine the premium, terms and conditions of the policy.
4. Brokers: These are independent insurance intermediaries who act mainly on behalf of the insured. They advise clients on suitable insurance policies, obtain cover from insurance companies and assist clients in placing and negotiating claims.
5. Assessor: This is a person who examines insured property or damage to it in order to estimate its value or the extent of loss. The assessor helps in determining the amount of compensation or claim due to the insured.