Difference between Insurance application & Insurance Policy

What are the components of an insurance application? How is an application different from an insurance policy?

An Insurance Policy application or an insurance application is the first document you present to an insurance company. In it you request an insurance policy from the company, stating which type of insurance you want, and this is all submitted before you sign an insurance policy of course. The insurance application must be submitted by the insured (the person requesting the insurance policy) and must be signed by them.

Difference between an insurance application and an insurance policy:

• The insurance application is your first step in getting an insurance policy after selecting an insurance company.
• The insurance policy is the actual contract between you and the insurance company that guarantees your rights, and it includes all the information regarding the policy from insurance value, premium, the type of policy, and what is actually insured.

The applicant: this is the person who fills out and submits the application to the insurance company

What should an insurance application contain?

1. The applicant: this is the person who fills out and submits the application to the insurance company. The application must contain all of the applicant’s information, information regarding the items that they want to insure including descriptions, photos, value, etc. in case of material objects. All the information must be 100% true under the “principle of good faith in insurance”. There must be a legitimate reason for the insurance policy and proof that if the insured item is damaged you (the applicant) will be the person who suffers from the loss. The insurance policy owner should be available at the time of the accident so that they may receive compensation. Take note that the insurance payout can only be transferred to the new owner of the insured items or to a creditor, no one else.
2. Always keep the insurance company informed of any changes that happen to the insured items. Any changes must be reported to the insurance company within 30 days, for example if you plan on traveling for an extended period or if you plan to rent your house.
3. If you wish to make any changes in the insurance policy the insurance company must be informed immediately. Example of these changes may be adding or removing a hazard from the insurance policy, adjusting the insurance amount, moving the insured items, or any other detail that was not in the original policy.

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