Insurance is a means of mitigating the risks to which a person is exposed in his or her being or his assets during his or her lifetime in order to mitigate them. The essence of this means is the cooperation achieved through the participation of persons at risk in confronting the effects of the achievement for each of them, by paying each of them for a contribution or a premium, and collect the amounts collected and then distributed to those affected by the disaster. Let’s discuss all contract insurance.
Fundamental Legal Principles of Contract Insurance
Principle of Insurable Interest
The insurance interest is available when there is a certain relationship between the person seeking the insurance (the insured) and the subject of the insurance so that the survival of the person or thing subject to the insurance has a moral or material benefit or both to the beneficiary of the insurance.
Principle of Utmost Good Faith
This principle stipulates that the insured shall provide the insurer with all the facts or matters relating to the insured risk on the one hand.
Principle of approximate Cause
It is intended that the Insurance Authority fulfills its obligation specified in the insurance contract, whether this obligation takes the form of loss compensation or payment of a certain amount if the insured risk is the cause of the loss. The immediate cause is an effective cause that is capable of initiating a series of incidents that ultimately result in loss without interference from any other independent external force.
Principle of Indemnity
That the compensation paid by the insured to the insured or the beneficiary may not exceed the actual loss value and shall in no case exceed the limits of the amount of insurance or the value of the subject matter, whichever is lower when the insured risk is realized.
If the insured risk is realized at a time when the insured is insured for the same thing as the insured, and for the same risk with valid insurance policies. To the sum of all insurance amounts.
Principle of Subrogation
That the insurance company has the right to replace the insured in recourse to third parties in the loss suffered by the provisions and to claim compensation.
Types of Contract Insurance
Contract Insurance- Auto Insurance
It is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft. In exchange for your paying a premium, the insurance company agrees to pay your losses as outlined in your policy.
Contract Insurance- Homeowners Insurance
It is a form of property insurance that covers losses and damages to an individual’s house and to assets in the home.
It is extra liability insurance coverage that goes beyond the limits of the insured’s home, auto or watercraft insurance. It provides an additional layer of security to those who are at risk of being sued for damages to other people’s property or injuries caused to others in an accident.
It is a contract between an insurance policyholder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money.