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The Process Of Buying Insurance

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A policy document will be issued. This will be the document showing the terms of the contract between the two parties. It will be important to read it carefully, noting the cover provided, policy conditions and the exclusions.

1. When I am ready to buy insurance, what should I do?
You will need to visit an insurance company of your own choice or any intermediary where you will be given a proposal form to complete. An assessment will be done based on the details given and then you will be required to pay some money commonly referred to as the premium.

2. What is a proposal form?
This can be referred to as an application form. You will need to complete the same as accurately as possible to enable the insurance company understand the risk.

3. Who are the intermediaries?
This will normally be an insurance agent or a broker. They are licenced by the Insurance Regulatory Authority (IRA) to sell insurance products on behalf of insurance companies. In return they are paid commissions.

4. Will I pay a higher amount of premium to cater for the commissions?
No. The commissions are paid by the insurance company and not the customer.

5. Must I be insured through an intermediary?
No. You can apply for insurance directly with an insurance company

However, you may need the services of the intermediary for your convenience. You will need to ensure that they are reputable and licenced by Insurance Regulatory Authority to transact insurance business.

6. What is the role of the intermediaries?
The intermediary will assist you in carrying out the following functions:

* Carrying out an insurance needs assessment. This will involve identifying the risks facing your business and deciding which insurance to purchase
* Compiling the necessary information required by the
insurance company and completing the required proposal forms
* Request for quotations from various insurance companies and analyzing them to see which suits your needs and at minimal costs.
* Assist in providing the necessary documents in the event of a claim and following up settlement on your behalf.

7. What happens if I suffer a loss as a result of wrong advice from an insurance broker?
All insurance brokers are required to have a professional indemnity policy before they are licenced. In the event that you suffer a loss due to wrong professional advice, then you will be in a position to claim from the broker who will in turn be compensated by this policy.

8. How does the underwriter assess the risk without visiting the premises?
This is done using the information that you provide in the proposal form. It is important that this information is accurate to enable the underwriter conduct a proper risk assessment and underwriting.
9. How are insurance premiums calculated?
The premium is calculated based on the type of risk, location, nature of business and the claims history of the client. The common methods are a rate per cent of sum insured or per thousand.
10. What assurance do I have that I am insured after paying the premium?
The insurer may upon payment of premium issue a cover note which will describe briefly what is insured and the amount of insurance Thereafter, a policy document will be issued. This will be the document showing the terms of the contract between the two parties. It is important to read it carefully, noting the cover provided, policy conditions, warranties and the exclusions.
11. What would happen if I want to terminate my insurance cover?
Should you want to cancel your insurance cover, you will need to inform the insurance company or your intermediary as provided under the policy conditions. Either party in the contract (you or the insurance company) has a right to cancel the policy. It is important to know the period of notice required for cancellation and how the refund if any, will be calculated.

12. What are my responsibilities as an insured?
* Complete the proposal form accurately and disclose all material facts
* Pay the premiums
* Comply with the requirements of the policy
* Notify your insurance company of any material changes in the risk
* Read the policy wording, the conditions and ensure that they meet your needs
* Report every event likely to give rise to a claim.

13. What are the responsibilities of the Broker/Agent?
* Give professional advice to the insured regarding the covers being sought
* Check and advise on choice of insurance company
* Follow up on issuance of policy documents and payment of claims
* Keep records of all your insurances and compile renewal information
* Advise on adequacy of cover.

14. What are the responsibilities of the insurance company?
* Issue the policy document without undue delay
* Ensure the terms are clear
* Issue renewal notices
* Deal with claims fairly, efficiently and quickly
* Inform the insured of any changes in the terms of the contract.