Question

In forming an insurance contract, when does acceptance usually occur? A - When an insured submits an application. B - When an insurer's underwriter approves coverage. C - When an insurer delivers the policy. D - When an insurer receives an application.

Answer 1

In forming an insurance contract, an acceptance usually occur when an insurer's underwriter approves coverage. The Option B is correct.

What is acceptance in insurance?

The term "offer & acceptance" is completed when a premium payment accompanies the offer made by the proposed insured or applicant and the insurer accepts the offer. Typically, the effective date of this policy would be the date the payment was accepted.

If the insurance company agrees that they will insure you, this is called acceptance. In some cases, the insurer may agree to accept your offer after making some changes to your proposed terms. But, the term "consideration" means the premium or the future premiums that you have to pay to your insurance company.

In conclusion, in insurance contract, the element of acceptance usually occur when an insurer's underwriter approves coverage.

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