List of insurance documents in 2020

List of insurance documents you should know in 2020.

This topic covers all the list of the four insurance documents in insurance business.

These documents means collectively all slips, cover notes, contracts, policies, certificates of entry or other insurance documents evidencing or constituting the Insurances.

The main objective of the insurance documents is to give to the insurer full particulars of the risk against which insurance protection is needed or desired.

Let’s see the various types of insurance documents used in insurance business.

List of Insurance Documents

These include the following;

  • The proposal form
  • The cover notes
  • The insurance certificate
  • Policy document

I will explain the insurance documents one after the other, starting from the proposal form.

1. The proposal form of the insurance documents

List of insurance documents you should know.

This is a questionnaire designed by the insurer to the proposal to complete a compliance with the principle of utmost good faith.

This is the means by which the insurer collect information from the proposer on the proposed risk which makes it possible to assess the risk and be able to take decision on their acceptability of the risk.

List of insurance documents you should know.

The proposal form usually contains the declaration that warrant the truth of the proposer.

The effect of this is that any misrepresentation would be a breach of contract and leave the insurer with the option of avoiding it.

Features of Insurance Proposal Form

List of insurance documents you should know.

The proposal form is usually designed into four main parts;

1. Generation Questions

This consists of the following information;

  • The proposer’s name: This identifies the proposer. The proposer name is important for identification and communication purpose. It helps to know whether the proposer is an individual or a corporate body.
  • Proposer address: This is also an essential requirement for communication. It is an underwriting factor in theft insurance and all risk insurance policy.
  • The location of the proposed risk where it is different from the address of the proposer.
  • The occupation of the proposer:  this is a better in some classes of insurance sales of occupations are normally hazardous. For instance, in personal accident insurance; sea divers, miners and mountain climbers and in case of motor insurance; commercial drivers and compulsive drinkers.
  • Information on previous and present insurance history: This this is registered by the insurer to let them know if special terms or premium have been imposed. It also helps to know whether the proposer had an insurance proposal rejected or declined or having an existing policy with another company. The essence of this is to know whether other policies of the indemnity exist for the purpose of contribution in case of a loss.

2. Particular Questions

List of insurance documents you should know.

These are questions which specifically relate information about a particular class of insurance with regard to the proposed risk.

The form is designed to reflect the hazards attached to the class of insurance and also the information on the values or limit of liability of the proposed risk.

List of insurance documents you should know.

Here are some example;

IN MOTOR INSURANCE

  • Types of vehicle
  • Make of vehicle
  • Registration number
  • Cubic capacity
  • Types of body
  • Chassis and engine number
  • Year of manufacture
  • Good carrying capacity
  • Passenger carrying capacity including the driver
  • Age of the proposer
  • Year of driving experience
  • Records of claims and accidents of the regular drivers

IN FIRE INSURANCE

(List of insurance documents you should know).

  • Construction of the building
  • Method of construction
  • Material used for construction
  • Number of storeys/floors
  • The age and state of the building

IN LIFE AND PERSONAL ACCIDENT INSURANCE 

  • The age of the proposer
  • The occupation of the proposer
  • The height and weight of the proposer
  • The medical history of the life to be insured

3. Declaration

List of insurance documents you should know.

This is usually at the foot of the proposal form, declaring that all information given by the proposer is true and no information has been withheld.

It further confirms the readiness of the proposer to accept unusual form of insurance contract like adjustment in premium if necessary.

List of insurance documents you should know.

It also describe the insurance proposal form as a basis of contract between the proposer and the insurance company.

In fact, the aim of declaration is to ensure that the proposer understand that any false information he give to the insurer shall be used against him later in the future.

4. Signature and date

The proposal form is to be signed by the proposer.

It is bodly printed below and date that the completion of the form does not represent the acceptance of the proposed risk until the fufil or deposit premium is received by the insurance company.

Contracts where proposal forms are used

The following are the classes of insurance where proposal form is prominently used:

  1. Motor insurance
  2. Life insurance
  3. Burglary insurance
  4. Fidelity guarantee insurance
  5. Money insurance etc.

While the following are the classes of insurance where the proposal form is not used.

  1. Marine insurance. Broker’s slip are used to provide necessary information required for the underwriting of the risk.
  2. Fire insurance involving large risks.
  3. Lloyds of London where the transaction of insurance business are through the use of slip.
  4. Engineering risk which requires surveying before it’s acceptance.
  5. Aviation risk which is accepted for insurance after carrying out survey.

List of insurance documents you should know.

Uses of the proposal form

Below are some uses of proposal form in the insurance documents;

  1. A proposal form is the platform on which insurance contact is based, and all information given by the insured forms part of the contract.
  2. It is the basic means by which the insurer is able to access information regarding the risk proposed.
  3. It also enables the insurer to determine premium charged, and any discount to be allowed.
  4. Proposal forms contains three main sections: personal data, information relating to the subject matter and information about insurance history.

Some functions of the insurance proposal form includes the following;

1. It serves as a convenient means by which the insurer obtains information on the proposed risk.

2. It serves as the basic of the contract, where the proposer is expected to provide truthful information to the question asked and if otherwise, such contract will be void based on misrepresentation.

3. The information provided in the proposal form is used to assess the proposed risk, whether it is acceptable or not.

4. It aids the offer and acceptance of risk.

5. It serves as a method of advertising through which insuring public obtains information on the particular class of insurance.

List of insurance documents you should know.

2. The cover Note of the insurance documents

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The second on the list of insurance documents is the cover note.

This is a temporary document effectively constituting a temporary policy.

The acceptance of an offer by an insurer is not compulsory as said earlier.

The insurer may require some time to see if it is possible to accept an offer by the insured or not.

However, at the time, the insured may need some evidence to show that insurance policy is in force.

Perhaps as a compromise solution, the insurer may be willing to issue a temporary policy called a cover note.

This document is accepted for a limited period.

It is used by the insured to provide temporary cover, while the details of the risk are being processed.

If the insurer eventually did not take the risk, then the temporary cover will have to be withdrawn.

Note that any temporary cover expires at the end of the indicated period. If a loss occurs during the use of the cover note, the insurer will be liable unless special term have been included in the cover.

List of insurance documents you should know.

Features of Cover Note

Below are features or the information on the cover note of the insurance documents;

  1. Name of insured
  2. Address of insured
  3. Location of the proposed risk
  4. Types of cover granted
  5. The date and time of the commencement of cover
  6. The registration number of vehicle (for motor insurance)
  7. The terms and conditions of the insurance contract
  8. The use to which the proposed risk will be put
  9. The type of the peril covered.

The statement is accompanied by an authorized signature of the authorized officers of the insurer or of the signature of the broker where it is issued by a broker.

List of insurance documents you should know.

Contracts where cover notes are used

Cover notes of insurance documents are mainly used in general insurance business such as motor, fire, and burglary insurance.

Taking motor insurance as an example, it is not feasible to issue a policy document once the proposed form has been completed.

Also the owner of the vehicle cannot wait without using the vehicle until all relevant documents are released.

In order to ensure that the motorist does not contravene the existing road traffic laws, he or she is issued the cover note to shoe that there is a contractual relationship between the insured and the insurer.

Please note that cover notes are not to be backdated, it must reflect the actual date and the time of issue which must be clearly shown.

List of insurance documents you should know.

3. The Certificate of Insurance

The third on the list of insurance documents is the certificate of insurance. This is a document that is legally required to be issued by the insurers in respect of compulsory insurance to the insured.

Contract where certificate of insurance is used

They are mainly required in the following classes of insurance;

1. Motor Insurance: It is important that certificate of insurance must be issued to a motor vehicle owner by the insurer which is considered as part of the particulars required by law.

It is the evidence that the motor vehicle owner has complied with the road traffic Acts, which made it an offence to put a vehicle on the road without a certificate of insurance.

2. Marine Insurance: There is a certificate issued in respect of each shipment made under a floating policy in which the sum insured reduces until it is finally exhausted.

The information on marine insurance certificate are;

  • Name of the insured
  • Type of cover granted
  • Type of vessel
  • Port of departure
  • Port of arrival
  • Conditions

3. Employer Liability Insurance: This is a compulsory insurance which must be effected by the employer of the labour.

Employers of labour are mandated by the factory Act 1968 and workman’s compensation 1987 to display the certificate of insurance at the entrance of the company.

The information on this certificate are;

  1. The name of the policy holder
  2. The policy number
  3. The commencement date
  4. Wordings of compliance with the Workmen compensation Act 1987
  5. The signature of an authorised staff of the insurance company

List of insurance documents you should know.

4. The Policy Document of the insurance document

The last on the list of insurance documents is the policy document.

This is prepared by the insurer recording the full insurance transaction between the insured and the insurer.

The acceptance of insurance proposal made by a proposer through the completion of insurance proposal form, will lead to the preparation of insurance policy document in which the proposer becomes the insured, recording the full insurance transaction between the two parties.

It is the evidence of contract between the two parties.

The policy is not the contract but an evidence of the contract between the insurer and the insured.

The policy forms spells out the terms and conditions of the contract. It also becomes evidence at the court of law following any disagreement over some issues between the two parties.

Components parts of policy document

There are two basic styles of policy form, they include the followings;

1. Narrative Policies: These forms of policy documents are those that describe the policy wordings in a story pattern, where provisions are not made for sub division or for different sections of the policy.

In drafting of this policy, simple English grammar is made use of of which the reader can easily understand. It is old and outdated and widely used in the marine insurance contract.

List of insurance documents you should know.

2. Scheduled Policies: The scheduled policy is the most common form of policy used by the insurance companies.

These sections are heading, the recital clause, the operative clause, the exception, the condition and the attestation clause.

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That’s it on the list of insurance documents you should know.

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