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INSURANCE DOCUMENTS

Course Learning Outcomes

Distinguish clearly the various principles in insurance related aspects

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PROPOSAL FORM

An insurance contract is effected when there is an offer an acceptance

Offer is made through the completion of proposal form and duly signed by the proposer

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The usefulness of proposal form

To assist the insurer in gathering information required to assess the risk proposed

To enable the insurer to consider application speedily and accurately

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The structure of proposal form

Requirements of Insurance Act 1996 Questions of general nature

- Proposer’s name and address- Risk address- Proposer’s occupation

Previous and present insurance- loss experience- sum insured- subject matter

Insurance related questions - questions which are specific to the type of insurance

Declaration - requires the proposer to warrant the answers are true; the information is complete; agree the proposal forms the basis of contract; accept the usual form of policy for that class of business

Signature - the proposer should always sign the proposal form as it represents the offer in the contract

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COVER NOTE

Evidence of protection for a temporary period of time

It provides provisional cover which the insurer reserving the rights to withdraw the cover

Provides usual coverage as in a standard policy; the contract is subject to tariff warranties and special clauses

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The contents

Name and address of the insured Time and date of commencement of cover Period of insurance Description of risk covered Sum insured Rate and premium Any special terms Cover note serial number Date of issue Signature of the authorised signatory Terms of cancellation Statement to the effect

CERTIFICATE OF INSURANCE

Normally issued when insurance is made compulsory (motor insurance)

It certifies that the insurance is issued by an authorized insurer

As an evidence of insurance to police and motor vehicle’s registration authority

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POLICY FORMS

Is a document drafted by an insurer Is not a contract but as a written evidence Need to be stamped Issued as a scheduled type

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The contents

Heading : full name and address of the insurer Preamble/recital clause : introduces the parties to

the contract Operative/insurance clause : specifies the perils

insured and the circumstances the insurer will become responsible

Exclusions : restrictions on the scope of insurance

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The contents

The schedule : information applicable to a contract – insured’s name and address, premium, policy no., date of issue, risk covered, period of insurance

Attestation/signature clause : signature of an authorized official of the insurer

Conditions : regulates the contract – express conditions, implied conditions

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ENDORSEMENT

Used to modify the terms and standard policy documents May be issued during the currency of the policy to record

alterations Alterations of :- Variation in sum insured- Change of insurable interest by way of sale, mortgage- Extension of insurance to cover additional perils- Change in risk- Transfer of property to another location- Cancellation of insurance- Change in name and address

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RENEWAL NOTICE

Usually issued a month prior to the expiry, reminding the insured the existing policy will expire on a certain date

All relevant information of the policy : insured’s name, policy no., expiry date, sum insured, premium

Advise the insured to disclose all material alterations in the risk, to revise the sum insured ( market value)

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CLAIM FORM

Document used to gather information relevant to assess claim : insured’s identity, insured’s interest in the loss, circumstances and extent of loss

It does not constitute admission of liability of the insurer

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DISCHARGE LETTER

When a claim payment is settled, insured’s is required to execute a discharge To avoid the possibility of any further claims on the loss

The insured declared that he :- Has received a sum of money from the insurer- The money received is in full satisfaction of his claim

The third party :- Has received a sum of money form the insurer- The money is paid on behalf of the insured- The money received is in full satisfaction

Settlement not by cash :- repair, reinstate or replacement has been effected- The work was carried out to the satisfaction of the claimant

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