Which of the following is an example of apparent authority of an agent appointed by an insurer?

Apparent authority refers to the situations where a third party reasonably believes that an agent has the authority to act on behalf of the principal (in this case, the insurer), based on the principal's representations or the context of the relationship. When considering the options provided, the scenario where the agent accepts a premium payment after the end of the grace period illustrates apparent authority well.

In this instance, if the agent accepts a premium payment outside of the expected time frame, it can create a perception for the policyholder that the agent has the power to make such decisions, suggesting a level of authority that may not formally exist within the contractual parameters set by the insurer. By accepting a late payment, the agent may inadvertently lead the policyholder to believe that their coverage remains in effect, which reflects poorly on the insurer if the issue later arises.

This contrasts with the other options where the actions taken do not align with typical authority of the agent and would generally not create a reasonable belief of authority in a third-party observer. For example, recommending a policy not offered by the company indicates a deviation from the company's offerings, denying a claim without consultation oversteps the bounds of agency authority, and providing advice outside their expertise can introduce misconceptions regarding the professional limits of the agent