Car insurance and the importance of the proposal form
- Author Peter Main
- Published May 24, 2020
- Word count 635
The transition from paper to digital hat in many ways changed both the format and the understanding of what a proposal form is in the context of car insurance. Pre internet, people would have to fill in a proposal form in order to obtain car insurance, often having been given a verbal quote first of all.
Nowadays, insurance companies have pushed the whole mechanism of obtaining car insurance online, and people had to fill in a significant amount of information, often over several screens, in order to obtain a car insurance quotation, and obtain cover itself. The difference, is that many people often think of the online questions as more of a questionnaire, rather than as a legal document, which in effect is what it is.
It is worth understanding the context of a proposal form, whether it be in paper or digital format, given that any wrong or misinformation can invalidate the insurance policy, and allow the insurance company to deny any liability in paying future claims.
A proposal form is the basis on which the insurance company obtains information on a potential customer, that allows them to assess a risk, and decide whether or not to agree to insure them, and if so, on what terms and conditions and at what cost. The proposal form will include a number of questions designed to elicit the information that the insurance company feels it needs to know in order to assess the risk.
What is often not understood about a proposal form, is that the potential customer has an obligation to disclose any information that might be relevant to the insurance company in order to make this assessment. This is irrespective of whether or not there are any questions that cover the information. This principle in insurance terms is known as utmost good faith. It puts the onus on the potential customer to disclose all information that an insurance company might reasonably expect to be relevant.
A proposal form will often have several parts to it, with several sub-sections depending on particular answers. One obvious example would be that of motoring convictions. If the question is asked whether or not the insured has any prior motoring convictions, it will normally be a simple yes or no answer to begin with. If the answer is no, then the insured goes on to another question. If the answer is yes then there is normally space for the insured to give details of what these convictions were.
This is a fairly obvious example of where the information is important for the insurance company to have full and frank details. If the prospective customer or insured gives wrong information, or misleading information, it can affect the judgement of the insurance underwriter. Previous convictions can be a good indicator of someones attitude to driving and any restrictions placed upon them, such as speed limits.
Some people will give false information in the hope that they will not be found at, although this is a dangerous and risky premise. Normally people will give the wrong information either because they don't remember things accurately, or they feel that some information is too old or out of date to be relevant. Again this is risky, because it can invalidate their policy.
One thing that is worth remembering is that insurance companies will normally only check the details given in the proposal form when there is a need for the insured to make a claim on the policy. If no claim is made, the insurance company will normally not bother. If a claim is made, then they will check if all the information on the written proposal form was accurate, and if not, it may well give them an opportunity to deny the claim and deny any liability under the terms of the policy.
Peter Main is a freelance writer who specialises in all types of personal finance, loans, car isnurance and car financing. He has a special focus on the benefits of leasing cars from major manufacturers such as Hyundai, and the benefits of leasing a car as opposed to buying aArticle source: http://articlebiz.com
There are no posted comments.
- 5 Ways to Spice Up Your Japan Travel Itinerary
- How ‘No-Code Tools’ Help Your Business.
- How to help a stray dog
- Storing Food for Emergency Situations
- Why Your Business Needs A Corporate Video in 2021
- Which vaccinations are recommended during pregnancy?
- How can I treat a dry throat and esophagus?
- What are the Irresistible Charms of Mature Women?
- Diamond Anniversary For Strat-O-Matic As Sports Simulation Leader Celebrates 60th
- Is it Worth Buying a New Van During Covid-19?
- How do you prepare New Plaster for Tile?
- The necessary digitization of the economy and business
- 5 DIY Water Damage Restoration Tips for Your Home
- 5 Ways Makes Money on YouTube
- Digital Marketing in Simple Terms
- An Introduction to the Game Recommendation Engine
- Best Oculus Quest Battery Packs
- Where to Watch The Promised Neverland Online
- TriVistaMedia says thank you to our clients in 2020 and we wish everyone tremendous success in 2021
- Firework Safety Tips- How to Enjoy Fireworks Safely?
- 6 Resolutions to Set Your Home in 2021
- How to control pests in the kitchen
- Gender gap in entrepreneurship
- Wondering How to Make Money With YouTube?
- How to Run a Productive Virtual Meeting
- Beware of ‘Get Rich Fast’ Programs
- Boko Haram: Nigeria’s biggest security problem
- here are simple ways to solve the difficulties of women loosing weight
- 5 Expert Tips for Writing An Employee Handbook
- Threshold Could Be Reduced for Blood Pressure Lowering Drugs