Accommodation Line

Accommodation line can be defined as an addition, deduction, transformation or any kind of change in an existing insurance contract. There are several reasons of introducing this change as this change is either requested by broker or the insurance company or the individual so that the policy can be customized according to the individual needs of these parties. In this type of flexible contract the broker or the third party involved in the deal receives greater commission and the client of the insurance policy receives a better coverage. Moreover the insurance company receives a valued client that can be converted into a life time client.

However accommodation line of insurance is not an ordinary practice and it is offered only to the clients that are highly valued and through the brokers that bring supreme clients and business to the insurance company. This can be termed as a thanksgiving gesture from the insurance company to the clients and the brokers that bring high level of business and loyalty of commitment to the insurance company. This can be termed as a gift to the customers for their loyalty towards the insurance company. This flexibility is offered in order to retain the valued clients and customers. The cost of changing, adding or transforming the policy is far less than the cost of losing a valued client along with his entire account to some competing insurance company.

Other Related Accounting Articles:

• Business Broker
• Balance Sheet Reserve
• Discretionary Investment Management
• Accommodation Endorsement
• Execution Only
• Relationship Banking
• Margin Account
• Yearly Price of Protection Method
• Residual Income
• Vertical Market