Home Insurance- What to expect from a home quote
Home Insurance Principles – most of us affect home building insurance without a second thought, but what are the mechanics of this process, indeed not just of building insurance but of insurance contracts in general. An agreement between two separate parties that is intended to be legally binding is known as a contract. For a contract to be effected, one party has to make an offer which another party has to accept with equal terms. In the case of insurance, an individual or company approaches an insurer with a wish to affect insurance say against their building burning down.
The insurance company will ask for in formation relating to the risk and then will offer the person a quotation. If the quotation is accepted, then a contract will exist. The quotation should include amongst other things the following information:-
- The premium that is payable
- The amount of taxation
- Any additional fees payable
- How long the quotation is valid for
- The name of the insurance company
- A Key facts document outlining all the salient information pertaining to the insurance.
The prospective policyholder uses this information to make an informed decision as to the suitability of an insurance contract. If buying a product form a broker that offers “Advice”, the quotation should also come with a recommendation. Once the person has accepted the cover, the insurance company will consider themselves on risk. In practice is always advisable for policyholders to obtain writing confirmation of cover before they consider themselves to be insured Mistakes are made with verbal agreements and we advise that you should not consider yourself on cover until such time as you have received confirmation in writing.
Utmost Good Faith – to arrive at this point where a contract of insurance exists, the insurers rely on the principle of utmost good faith. All insurance contracts should be entered in to free from fraud and fraudulent intent. The purchaser should therefore tell the insurance company all of the relevant underwriting information and not withhold any information which is likely to alter the insurer’s assessment of the risk proposal. The term to describe important information is known as material facts. Mostly, questions on the proposal form will be sufficient to give the insurance company a true picture of the risk presented (providing of course that the policyholder has told the truth.) However, not even the widest form of proposal form can ask every question and it is the policyholder’s duty to disclose any additional information that the insurance company might deem to be relevant. This may all seem a little grey but in effect in all works quite well, policyholders that are in any doubt as to what constitutes a material fact should always consult with their insurance company or broker. Failure to disclose a material fact could result in a claim being declined In return, the insurance company must present the policyholder with a policy document and let him know all of the relevant terms and conditions and warranties.
Insurable Interest – the above term relates to your legal right to obtain insurance. Usually this right exits because of your ownership of an object. In the case of a building or your home contents, you own the items so you have a right to insure them. Sometimes the right exists on goods that you have borrowed or have rented although in this instances, often a contract is often offered stating where the responsibility for insurance rests ( The case of rented Electrical equipment is a good example.
Home Insurance Principles- A guide from Asseture