Obtaining an Insurance Policy: Steps to Be Followed

  1. Identifying an insurer-one should start by comparing the policies offered by various available insurance companies. Either by directly approaching the insurance company or using a trust worthy insurance broker/agent.
    • Insurance broker-this is full time insurance agent who works for different insured people.he/she is paid commission for the services offered.
    • Insurance agent-this is a part time employee of one of the insurance companies.
  2. Filling in the proposal form-questions should be answered fully and truthfully and the form returned to the insurer for consideration
  3. Calculation of premiums-using the information provided in the proposal form,the insurer may decide to undertake the risk or may decline.Wherenecessary,the insurer may inspect the property to be insured before accepting premiums.
  4. Issuance of a cover note-a cover note is also known as a binder it is issued by the insurer as a temporary document of proof that a contract exists between the insurer and the insured.
  5. Issuance of the policy-the main contractual document between the insured and the insurer.it stipulates the agreement between the insurer and the insured regarding the risk covered. Insured is given an insurance policy document as evidence that a contract exists.

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