Question

Which of the following is an example of apparent authority of an agent appointed by an insurer?

1) The agent signs a contract on behalf of the insurer without proper authorization
2) The agent makes a statement about coverage that is not supported by the policy
3) The agent provides incorrect information about the premium amount
4) The agent fails to disclose important policy details to the insured

Answer 1

An example of an agent's apparent authority occurs when they make statements about coverage not supported by the policy, giving the impression they have the power to do so on behalf of the insurer.

Step-by-step explanation:

An example of apparent authority of an agent appointed by an insurer is when the agent makes a statement about coverage that is not supported by the policy. Apparent authority refers to a situation where a reasonable person would understand that an agent has the authority to act on behalf of the insurer, even if that authority has not been explicitly granted. In cases where an agent speaks or acts in a manner that seems to be within their authority, the insurer can sometimes be held accountable for the agent's actions, despite the lack of actual authority.