Insurable hobby might be characterizes as a money related enthusiasm for the topic of contract.It is advantageous to say here that no individual can go into an agreement with an insurance agency unless he has insurable enthusiasm for the article.Insurable premium is a legitimate requirement.Any individual can guarantee his own particular house, property, exchanged great, manufacturing plant, cows, adornments, life, and his own youngsters' life.In instance of misfortune he will have the capacity to get cash from the insurance agency.
2-Utmost Good Faith:
The insurance contract between two parties (Insured and Insurer) requires absolute and utmost good faith.Both parties should disclose all the facts to each other. Any false information or non-disclosure of material facts make the contract invalid.For instance, a person insures his life but does not disclose to the insurance company that he had earlier suffered a heart attack.If he dies of a heart attack, the insurance company is not liable to pay insurance money.
3-The Principle Of Indemnity:
All insurance contracts, except life insurance are the contracts for indemnity.It is based on the idea that the assured shall be compensated in case of loss only.The insured is not allowed to receive a higher amount than the amount of loss, which he actually suffers.For exmaple, a person get his house insured for $500.He can claim only $500 from the insurance company.
4-Doctrine Of Contribution:
Sometimes one person can get his goods and property insured from more than one insurance company.It is also called double insurance.In case of loss each company will contribute for the loss, but the compensation of loss will not exceed the amount of actual loss.The principle of contribution (double insurance policy) does not apply to life insurance.
5-Proximate Cause:
An insured person can recover the loss only when it is caused by any of the risks insured against.Such risk should be the nearest, not the remote, cause of the loss.For example, the cargo of wheat carried by a ship was insured against sea hazards.Rats made a gap in the lavatory channel of the boat.As a result,seawater entered the ship and damaged the wheat.The insurance company was held liable payment because the proximate cause of loss was seawater.The insurance company would not be liable if rats directly destroyed the wheat.
6-Cancellation:
Both parties (insurer and insured) have the right to cancel or terminate the insurance policy before its expiry date.So, their relationship comes to an end on the date of cancellation of policy.
7-Arbitration:
Both parties (insurer and insured) appoint an arbitrator in writing if there is any dispute regarding insurance claim.The main object of this clause is to reduce or minimize litigation.
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