The proposal form is also known as the application form for car insurance. The form contains the standard questions the insurance company needs to be answered by the person wanting to insurance his/her car.  The reasons why a proposal form needs to be completed are:

• To provide the insurance company with sufficient information to assess the risk before making a decision to offer the car insurance or not. The car that needs to be insured as well as the risk profile of the person seeking car insurance is required on the proposal form.
• Taking out car insurance is entering into a legal contract and the proposal forms part of the contract.
• It contains information about past insurance experience and assists the insurance company in deciding on the premium to ask and whether the applicant qualifies for a reduce rate.
• The information will help the insurer decide what exclusions, conditions or endorsements are required.

The proposal form can be completed in writing or done verbally over the phone.  In terms of the rules of Financial Introductory and Advisory Services Act (FAIS), the insurance company must keep a copy of the written or verbal proposal form on record. As an insured client you are entitled to a copy of the proposal form.