Documents used in Insurance

Documents used in insurance

• The following documents are used in insurance:

Prospectus.

• Shows the types of risks that can be covered.
• Shows the name of the insurance company.
• Contains premium to be paid.
• States compensation to be paid.

Proposal form

• An application for insurance cover.
• Forms the basis for an insurance contract.
• Gives details of items to be insured.
• Answered in utmost good faith.
• Other details relevant to the items to be insured are also provided freely.
• Asks questions about the items to be insured.
• If the information given on them is false the effect is that the insurance policy/contract is rendered void.
• The information provided on it enables the insurer to:
• Assess details of the risk.
• Decide whether or not to accept the risk.
• Calculate fair premiums.
• Determine whether or not there is insurable interest.

Cover note

• It is a temporary insurance certificate.
• Is issued while investigations are in progress pending issue of actual policy.
• Is used when immediate cover is required e.g. vehicle insurance.
• Is issued after payment of the first premium.
• Contains terms and conditions of the insurance contract.
• Is used to claim compensation in the event of a loss incurring.

Policy

• Is issued after a cover note.
• Is a contract of insurance.
• It gives details of the risk covered.
• States premium to be paid.
• Contains terms and conditions that are applicable to the insurance contract.

Claim form

• Is completed by the insured.
• When claiming compensation.
• Asks questions about:
• The risk insured.
• The loss incurred (details of the loss, date of the loss, and police report)
• Policy number
• Policy holder.
• Cause of risk.
• The information given in it allows the insurance companies assessors to:
• Assess the exact cause of the loss.
• Calculate the amount of compensation.
• It is also completed in utmost good faith.

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