What is required of you when a new client requests automobile insurance under the Compulsory Automobile Insurance Act?

When a new client requests automobile insurance under the Compulsory Automobile Insurance Act, the appropriate action is to provide an application for auto insurance and submit it to an insurance company. This process is essential as it ensures that the client is systematically evaluated for coverage and that all necessary information is collected for underwriting purposes.

Submitting an application supports compliance with legal requirements, as the Act mandates that individuals must have proper insurance coverage for their vehicles. This step enables the insurance company to assess risk accurately and decide on the terms of the policy, including coverage limits and premium amounts. Ensuring that the client completes an application initiates the official process of obtaining insurance, safeguarding both the client’s interests and the insurance provider’s obligations.

The other options do not fulfill the legal and procedural requirements set forth by the Act. Referring a client to another broker, binding coverage immediately, or collecting premium before an application is submitted do not adhere to the necessary steps in securing automobile insurance.