Before signing an insurance contract, the people must read it carefully to understand all its provisions. If need be, the advice of an insurance professional can be requested. Typically, this role is reserved to insurance intermediaries, such as an insurance broker. Likewise, the person can ask for the advice of a legal expert. In a contractual relationship, everything is negotiable, except for the insurances required by law. The recommendations are formulated by the National Bank of Moldova, in partnership with the Independent Think Tank “Expert-Grup”, as part of a set of informative materials on various financial topics, aimed at consumers of all ages, IPN reports.
An insurance contract contains standard provisions for any civil contract. The person should check that the contractor’s data is entered correctly, as insurance companies use standard contracts and employees use contract templates. It is also important to correctly identify the insured risk – possible but uncertain future events or phenomena provided for by the insurance contract, to which a person’s life, health or property are exposed. This is essential because in the event of errors, the service procedure may be delayed or may serve as a reason for refusal to pay compensation or insurance.
Attention should also be paid to the validity period of the insurance coverage. Usually, the term is one year, but there are insurance contracts with shorter terms, for example in the case of health insurance for travelling abroad or “Green Card” insurance. In the case of life insurance, insurance contracts are signed for a longer term – decades – and it is necessary to understand that, by signing such a contract, one enters into a long-term contractual relationship, which obliges the person to pay the insurance premium annually.
The conditions under which the insurer can terminate the insurance contract and its renewal process must be examined. Likewise, the provisions of the contract that can be negotiated must be examined in detail. “We must examine in detail the provisions that are often negotiable, have a significant effect on the insurance premium and constitute an important lever to obtain a reduction in the price of insurance. Insured risks, i.e. the risks that are covered by the insurance company. Insurance companies modify the risks covered according to the requirements of the insured entity. It should be understood that each risk is calculated separately and, if new risks are added, the price of insurance will increase and vice versa – by excluding particular risks, the price can decrease,” said the NBM.
The insurance premium can be paid in full or in installments. If the amount of the insurance premium is set in foreign currency, it could generate currency risks in the case of long-term contracts. The determination of compensation and insurance is one of the most important provisions of a contract, since the violation of the procedure for submitting compensation claims, including the deadlines, necessary documents and contact information mentioned in the contract can lead to partial or total refusal of payment by the insurer.
