Why is the Insurance Company not the Proposer in an Insurance agreement?

 

In the Insurer’s case, they are generally not aware of all facts about the insured unless the insured tells them, therefore the Insurer is considered to be at a disadvantage as they cannot examine all aspects of the insurance that are material to them.

Hence, the Law sees the person taking up the policy as the proposer (main supplier of material facts to the agreement), and any non-disclosure of material facts will render the policy void.

In the Insured’s case, they can examine the specimen copy of the policy before accepting the terms in it.

Therefore, it is very important for the Insured to make a full and complete disclosure of material facts relating to the agreement to ensure that in the event of a loss, the claim is received without any complications.