Texas All Lines Adjuster Practice Test

What does express agency authority allow the agent to do?

1. Act based on implied consent from the principal

2. Act on behalf of the principal as specified in writing

3. Represent the insurer publicly

4. Follow verbal instructions from the principal

The correct answer is: Act on behalf of the principal as specified in writing

Express agency authority allows an agent to act on behalf of the principal as outlined in a written agreement. This specific type of authority is clearly defined within the terms of a contract or formal agreement, detailing the powers and limitations of the agent’s role. In the context of insurance and agency relationships, express authority ensures that the agent operates under clear guidelines provided directly by the principal, which establishes accountability and delineates the scope of the agent's capability to bind the principal to contracts or decisions. This formal written directive also serves to protect both parties by ensuring that all actions taken by the agent are in alignment with the principal's intentions and standards. The other options presented like implied consent, following verbal instructions, or representing the insurer publicly do not specifically capture the essence of express authority. Instead, they suggest different forms of agency authority, such as implied authority or informal agreements, which may lack the clarity and enforceability provided by a written contract.