Applying for insurance

Who needs to apply for insurance?

If you want to take out an insurance policy, you need to apply to the insurer and be accepted before you can be covered. As part of your application, the insurer will ask you questions to help determine whether they can insure you and what premium they can offer.

What is the application process?

To apply for insurance, you can approach the insurer directly, through a broker or agent or make use of service like Choosi, where you can compare multiple products in the one place. Applications can usually be taken over the internet or by phone.

The first step is to get a quote from the insurer, which they provide using the answers you supply to a series of questions that determine firstly if they can insure you at all, and secondly at what cost. The quote offered by the insurer states the amount of insurance premium you will need to pay in order to be covered by the policy you’ve applied for.

Quotes can vary greatly between different insurers and even between different level policies by the same insurer, so it is highly recommended that you obtain and compare several quotes before choosing the one that suits you best.

Once you find a quote you’re happy with, you can turn the quote into an application and provide all the details requested by the insurer. Insurance policies are only valid once your application is accepted by the insurer and your initial premium has been paid.

Reading the Product Disclosure Statement (PDS)

When agreeing to take out a policy you should read the PDS for the insurance policy to ensure that you are getting the cover you need for a price you can afford. Your insurer will provide all the information you need, but it is your responsibility to be fully informed about the terms of conditions of the policy. You may want to keep a particular eye out for things like waiting periods, exclusions and special conditions.

Completing the application form

It is crucial that you are completely honest when completing the application form, as claims can be denied if the insurer finds that you haven’t provided correct details. For example, if you modified your car but did not declare it to your car insurer, they may not pay out your claim if you are involved in a road accident because you withheld information.

It is just as important to keep your insurer up to date with any changes to your policy, like your address, new valuables added to your home for home insurance or new drivers of your vehicle for car insurance.

Posted: 24 Apr 2012