In insurance terms, what does implied authority permit an agent to do?

Implied authority allows an insurance agent to undertake actions that are not explicitly outlined in the written contract but are necessary to complete the duties inherent in their role. This means the agent can perform certain activities that are assumed to fall within the scope of their responsibilities, even if those activities are not specifically mentioned in the agency agreement.

For example, if an insurance agent is tasked with selling home insurance, it is implied that they can also answer customers’ questions, gather necessary information for applications, and process claims even if these functions are not detailed in the contract. This understandability allows agents to operate effectively within their role while still adhering to the limitations of their actual written authority.

Implied authority does not permit an agent to act outside the written contract in a way that contradicts the insurer's rules or regulations. The agent cannot negotiate new contracts unless expressly authorized, nor can they promote competing companies, as doing so would typically breach the obligation to represent their primary insurance company.