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Explain the procedure of obtaining an insurance policy.

Answer Text:
- filling a proposal form: applicant to be honest and to display utmost good faith. Facts on the form helps
in calculating premiums.
- Determining of premium to be paid: insurer calculate the premium basing on the filled proposal form or makes arrangement to
inspect the property.
- Payment of the first premium
- Issuing of cover note(binder): this serves as evidence that the person to whom it is issued is insured and would be
compensated in case of a loss from the insured risk.
- Issuing of policy: replaces cover note and is a contact between insurer and the insured.