Auto Insurance Proposal and Cover Note

A proposal form is an application form to be filled in by you, if you are buying insurance from an Insurance Company for the first time. It will generally ask for your information on the vehicles and to be insured, including their values, your personal data and also details of your insurance history, etc.

Cars in traffic jam.The insurance company base their decision on whether to accept or reject your proposal and what terms to impose on the information you provide in the Proposal Form.

As the information given is crucial to your Insurers, you have a Duty of Disclosure to provide all facts material to the insurance. Please read the “Important Notice” appearing on the Proposal Form.

You are required to sign a declaration that the information that you provide is the truth and that it shall form the basis of the contract.

What Should You Do When Filling an Auto Insurance Proposal Form?

When filling an Auto Insurance Proposal Form, you must state all facts material that you know. These facts material will affect insurance company whether they will receive or reject your proposal or charge you additional fee. In Life Insurance, facts on your health and occupation are facts material.

What happens if insurance agent makes mistakes or fills untrue information?

Even if the matter occurred not caused by your mistake, Insurance Company may refuse the contract. Due to this, you should always read what is written or fill meticulously before signing the auto insurance proposal form.

What is a Cover Note?

After you pay premium, an agent will issue a cover note as a temporary protection before the insurance company decide whether to cancel or receive proposal you. It will expire after that note ending date or when your proposal is rejected or when a policy is issued by the insurance company.

Make sure you get one cover note copy with complete information of everything on auto insurance coverage such as sum insured, premium, excess and protection period after paying the premium to an insurance agent.

Contact your insurance company if you do not receive your insurance policy after 30 day.

What should you do when considering buying a policy?

1. Always read and understand the policy terms and proviso.

2. Do not buy an insurance policy only because the push from insurance agent. Do only when you know the policy and if you need it. However, under law, you must own an auto insurance.

3. When you have your policy you must always pay the premium payments specified.

4. If you take too many policies, the insurance company probably will doubt it and they may cancel your policy.

What should you do if you involved in an accident

Make a report to police in 24 hours time on the accident.

Notify your insurance company in writing as soon as possible all the details about damages or losses which occurred by including the police report. The reasonable time period to report to the insurers is within 14 days. However, for cases which involves limb injury; where a policy holder is hospitalized due to accident, they should report to insurance company once being able to do so. If there is any case, other party charge you and you accept a summons to court, do not plead guilty but notify the matter to your insurance company. If you do not do so, the insurance company may never be responsible in defending your interest when there are claims on you or claims for the damages of others vehicle.

Final question on yourself

Do you own an auto insurance policy or life insurance policy? Have you read the terms and conditions of the policy? Do you know that you are tied down to various terms and conditions?

09-01-2009 by Sorli

category: Auto Insurance

What is Insurance Exactly

What is insurance exactly?

Insurance is risk transfer of one individual like you, or an organization, such as your company, to the insurers. You or your company shall be known as policy holder. Insurance company will receive payments from you in form of premium and if you experience any loss or damage, the insurance company would pay compensation to you.

What is an insurance.

Insurance basic principle

For example, policy holder (you) must have legal interest on the goods or life that you insure. This mean, you would bear the financial loss in case damage or loss happened to life or property that you insured.

You do not need to purchase more than one policy or plan to protect your property. If you own more than one policy, you can only make one claim if any loss or damage happens. The payment amount that can be paid will be contributed by the involved insurance company. As such, you cannot make profit from general insurance policy or plan. If you experience loss, insurance company would pay appropriate compensation or you will be put at same state before loss happen. However, you can buy more than one policy to protect your life.

Contract of insurance is on full principle of absolute trust. As such, you as policy holder or plan must disclose all necessary important information. If you fail to reveal that information, your policy or plan may not be valid and you will not be protected on any loss or damage.

Buying Insurance Policy and Essential Guide When Buying Insurance Policy

You can buy insurance policy at:

  • Directly from the insurance company
  • Through registered agent or licensed brokers
  • Via banking institutions which possess bancassurance arrangement with insurance company
  • Through the internet

Essential guide when buying insurance policy:

  1. Understands your insurance policy including product features, conditions, benefit and its exemption limit.
  2. Ensure that insurance premium which will be paid is reasonable.
  3. Ensure the protection amount is enough and suitable your necessity.
  4. Ensure all important facts are fully disclosed.
  5. Deal by registered agent/licensed brokers or directly with the insurance company.
  6. Monitor the protection period and time to pay the premium.
01-01-2009 by Sorli

category: Insurance Basic