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Accommodation Line Definition
Insurance offered as an addition or modification to a standard insurance agreement is an accommodation line. Typically, an accommodation line on its own is not an insurance policy, it is written or attached to an existing standard policy.
An accommodation line comes with greater coverage for the insured and higher commission for the broker or agent.
An insured can request this modification to a standard insurance for personal benefits. An agent or a broker can also suggest it.
A Little More on What is an Accommodation Line
Insurers do not grant an accommodation line to all insured persons, there are certain factors that influence this type of insurance. Typically, influential brokers or agents and highly valued customers (insured individuals) are granted accommodation line. Accommodation line is an addition to standard insurance such at business insurance, home insurance or life insurance.
Oftentimes, insurers reward customers and brokers who have displayed a high level of loyalty to the company by granting them accommodation line. Both a customer and broker that are beneficiaries of accommodation line enjoy increase in coverage and a rise in commission respectively, while the insurer maintains the business the customer.
Example of an accommodation line
The illustration below shows how an accommodation line works;
Bright is a customer to an insurance company and has a life insurance policy worth $1 million with the company. Bright desires to purchase an additional life insurance coverage as a modification to the existing policy but finds out that most insurance companies do not offer additional coverage to an existing policy.
Bright the walks up to Lilian, a life insurance agent and makes his desire known. Because Bright is a valuable customer to the insurance company, an accommodation line is then added to his existing life insurance policy. This addition increases the coverage of the existing policy.
Reference for “Accommodation Line”
Academics research on “Accommodation Line”
Trading speed for accuracy? Managing goal conflict and accommodation in the US unemployment insurance program, Wenger, J. B., O’Toole Jr, L. J., & Meier, K. J. (2008). Trading speed for accuracy? Managing goal conflict and accommodation in the US unemployment insurance program. Policy Studies Journal, 36(2), 175-198. Public managers must often cope with competing and conflicting goals. The common formulation is to assume that managers must trade‐off goals against each other. But is this always true? An alternative hypothesis is that sometimes managers may instead be able to improve outcomes on multiple goals simultaneously—by altering management practices. We test this “trade‐off” notion using a panel of state‐level administrative data from the U.S. unemployment insurance (UI) system from 1997 to 2004 and qualitative interviews from selected states. The trade‐off examined is timeliness of UI benefit payments versus the quality of UI determinations. In general, we find that state administrators often adopt management practices that facilitate improved outcomes for both timeliness and quality, indicating no trade‐off but instead a synergy between outcomes. We also find evidence of a feedback effect linking higher performance on timeliness to better quality determinations.
Accommodation at work: Some phonological data and their implications, COUPLAND, N. (1984). Accommodation at work: Some phonological data and their implications. International Journal of the Sociology of Language, 1984(46), 49-70.
The Importance of State Anti-Discrimination Laws on Employer Accommodation and the Movement of their Employees onto Social Security Disability Insurance, Burkhauser, R. V., Nicholas, L. H., & Schmeiser, M. D. (2011). The Importance of State Anti-Discrimination Laws on Employer Accommodation and the Movement of their Employees onto Social Security Disability Insurance. Michigan Retirement Research Center Research Paper, (2011-251). The rate of application for Social Security Disability Insurance (SSDI) benefits, as well as the number of beneficiaries has been increasing for the past several decades, threatening the solvency of the SSDI program. One possible remedy is to promote continued employment amongst those experiencing the onset of a work limiting disability through the provision of workplace accommodations. Using the Health and Retirement Study data linked to Social Security administrative we find that the provision of workplace accommodation reduces the probability of application for SSDI following disability onset. We estimate that receipt of an accommodation reduces a worker’s probability of applying for SSDI by 7.4 percentage points over five years and 5.7 percentage points over 10 years. We then attempt to control for the potential endogeneity of accommodation receipt by exploiting exogenous variation in the implementation of state and federal anti-discrimination laws to estimate the impact of workplace accommodation on SSDI application in an instrumental variables (IV) model. In contrast to our expectations, we find that the IV estimates are actually larger in magnitude than the standard estimates, implying a reduction in the probability of applying within five years of 26 percentage points, and applying within 10 years of 39 percentage points. Overall our results imply that increasing accommodation is a plausible strategy for reducing SSDI applications and the number of beneficiaries.
The sharing economy as community marketplace? Trust, reciprocity and belonging in peer-to-peer accommodation platforms, Celata, F., Hendrickson, C. Y., & Sanna, V. S. (2017). The sharing economy as community marketplace? Trust, reciprocity and belonging in peer-to-peer accommodation platforms. Cambridge Journal of Regions, Economy and Society, 10(2), 349-363. What is the role sociality and belonging play within the particular exchange model that the sharing economy embodies? This article presents a theoretical review and a comparative analysis of the main sharing platforms in the accommodation domain in order to outline a conceptual framework on the relations between trust, reciprocity and belonging in the sharing economy. We argue that mobilising a sense of community is not only instrumental to promising a more intense consumption experience; it is crucial to eliciting users’ active participation in the self-regulation of peer-to-peer exchanges and for dealing with relevant trust issues, especially when sharing implies co-presence and/or non-monetary compensation. The drivers and potential outcomes of the decline in social depth of sharing practices are discussed.
The Return of Bargain: An Economic Theory of How Standard-Form Contracts Enable Cooperative Negotiation Between Businesses and Consumers, Johnston, J. S. (2005). The Return of Bargain: An Economic Theory of How Standard-Form Contracts Enable Cooperative Negotiation Between Businesses and Consumers. Mich. L. Rev., 104, 857.