Proposal Forms

Aperçu

Before any insurer will cover you, it wants to know exactly who you are, what you own, and what you are asking it to carry. It gathers all of that on one printed sheet: the proposal form. It looks like an ordinary application, yet the small print at its foot quietly turns every answer you write into a promise, and that promise decides whether your claim is ever paid.

In this lesson you will learn what a proposal form is, the five kinds of information it collects, and the work it does for the underwriter who prices your risk. You will see how it puts the duty of disclosure into practice, why the declaration at the bottom matters more than anything above it, and the exact mistakes on a form that let an insurer walk away from a claim.

Objectifs

Define a proposal form and describe the information it gathers
Explain the functions and uses of a proposal form in the underwriting process
Explain how the proposal form gives effect to the duty of disclosure
Describe the legal status of the proposal form once the contract is concluded

Note de cours

A driver in Ibadan fills in a motor proposal form. Where it asks whether anyone else will drive the car, she writes that she alone will. Months later her nephew borrows the car, crashes it, and she puts in a claim. The insurer reads the form, points to her answer, and refuses to pay a kobo. She feels cheated, but the ground was laid the day she signed. Every word on a proposal form can be held against the person who wrote it, because the form is where the whole contract of insurance begins. Learn how it works and you learn where cover is won and lost.

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Évaluation de la leçon

Félicitations, vous avez terminé la leçon sur Proposal Forms. Maintenant que vous avez exploré le concepts et idées clés, il est temps de mettre vos connaissances à lépreuve. Cette section propose une variété de pratiques des questions conçues pour renforcer votre compréhension et vous aider à évaluer votre compréhension de la matière.

Vous rencontrerez un mélange de types de questions, y compris des questions à choix multiple, des questions à réponse courte et des questions de rédaction. Chaque question est soigneusement conçue pour évaluer différents aspects de vos connaissances et de vos compétences en pensée critique.

Utilisez cette section d'évaluation comme une occasion de renforcer votre compréhension du sujet et d'identifier les domaines où vous pourriez avoir besoin d'étudier davantage. Ne soyez pas découragé par les défis que vous rencontrez ; considérez-les plutôt comme des opportunités de croissance et d'amélioration.

The document a person completes to apply for insurance cover is the: A. Cover note B. Policy document C. Proposal form D. Renewal notice Answer: C
The person who completes a proposal form is known as the: A. Underwriter B. Proposer C. Broker D. Actuary Answer: B
The clause at the foot of a proposal form that makes every answer a warranty is the: A. Arbitration clause B. Average clause C. Basis of the contract clause D. Excess clause Answer: C
A proposal form gives effect chiefly to the principle of: A. Indemnity B. Utmost good faith C. Contribution D. Subrogation Answer: B
Which of the following is NOT normally a function of a proposal form? A. Supplying information to the underwriter B. Helping to fix the premium C. Paying the claim to the insured D. Providing a record of what the proposer disclosed Answer: C

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Questions précédentes

Vous vous demandez à quoi ressemblent les questions passées sur ce sujet ? Voici plusieurs questions sur Proposal Forms des années précédentes.

WAEC SSCE - Insurance - 2017

Question 1 Rapport

(a)(i) What is a proposal form?
(ii) List four general questions that are contained in a proposal form.

(b) List and explain three documents used in effecting insurance contracts.

Réponse

(a)(i) What a proposal form is

A proposal form is the printed document supplied by the insurer which the intending insured (the proposer) completes and signs to apply for insurance cover. It contains a set of questions through which the proposer supplies all the material facts about himself and the subject matter of the insurance. The information given forms the basis of the contract, enabling the insurer to assess the risk, decide whether to accept it and fix the appropriate premium.

(a)(ii) Four general questions contained in a proposal form

The full name and address of the proposer.
The age, sex and occupation of the proposer.
A description of the subject matter to be insured and the sum to be insured (its value).
Details of previous insurance and claims history, including whether any insurer has ever declined, cancelled or refused to renew a policy.

(Other acceptable general questions: the period of insurance required and a declaration that the answers are true.)

(b) Three documents used in effecting insurance contracts

Proposal form: As explained above, it is the document by which the proposer formally applies for cover and discloses the material facts on which the insurer bases its decision. It represents the offer stage of the contract.
Cover note: A temporary document issued by the insurer to confirm that cover is in force pending the preparation of the full policy. It gives the insured immediate protection and states the main terms, remaining valid for a short period (often 30 or 60 days) until the policy document is ready.
Insurance policy (policy document): The formal, legal contract between the insurer and the insured. It sets out in detail the names of the parties, the subject matter, the risks covered, the sum insured, the premium, the period of cover, the exclusions and the conditions. It is the conclusive evidence of the terms of the agreement.

(The certificate of insurance and the premium receipt are also acceptable documents.)

Détails de la réponse

(a)(i) What a proposal form is

(a)(ii) Four general questions contained in a proposal form

The full name and address of the proposer.
The age, sex and occupation of the proposer.
A description of the subject matter to be insured and the sum to be insured (its value).
Details of previous insurance and claims history, including whether any insurer has ever declined, cancelled or refused to renew a policy.

(Other acceptable general questions: the period of insurance required and a declaration that the answers are true.)

(b) Three documents used in effecting insurance contracts

Proposal form: As explained above, it is the document by which the proposer formally applies for cover and discloses the material facts on which the insurer bases its decision. It represents the offer stage of the contract.
Cover note: A temporary document issued by the insurer to confirm that cover is in force pending the preparation of the full policy. It gives the insured immediate protection and states the main terms, remaining valid for a short period (often 30 or 60 days) until the policy document is ready.
Insurance policy (policy document): The formal, legal contract between the insurer and the insured. It sets out in detail the names of the parties, the subject matter, the risks covered, the sum insured, the premium, the period of cover, the exclusions and the conditions. It is the conclusive evidence of the terms of the agreement.

(The certificate of insurance and the premium receipt are also acceptable documents.)

Voir la réponse

Proposal Forms

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