Dual insurance means insurance of the same subject with two different companies or with the same company under two different policies. Insurance is possible in the case of compensation contracts such as fire, transport and property insurance. So let`s say you`re in a car wreck caused by a third party and you file a claim with your insurance company to pay for damage to your car and medical expenses. Your insurance company will take possession of your car and medical expenses to intervene and file a claim or lawsuit with the person actually responsible for the accident (i.e., the person who should have paid for your losses). To claim the amount of the insurance, the insured must be the owner of the object both at the time of the conclusion of the contract and at the time of the accident. General insurance can cover almost anything, and everything except the five main types of insurance available under it are – it`s our end principle that creates an insurance contract, and probably the simplest. For example, imagine that you have two insurance contracts for your used Lamborghini in order to be fully insured in all situations. Let`s say you have a policy with Allstate that covers $30,000 in property damage and a state farm policy that covers $50,000 in property damage. If you end up in a wreck that causes $50,000 worth of damage to your vehicle.
Then, about $19,000 will be covered by Allstate and $31,000 by State Farm. General Insurance – Anything but life can be insured under general insurance. It provides financial compensation for losses other than death. General insurance covers loss or damage to all assets and liabilities. The insurance company promises to pay the sum insured to cover losses related to the vehicle, medical care, fire, theft or even financial problems during the trip. In the insurance world, there are six basic principles or forms of insurance coverage that must be respected, including extreme good faith, insurable interest, indemnification, immediate cause (proximal reason), recourse (transfer of rights or guardianship) and contribution. If you are able to understand these 7 principles, you will get the tools you need to defend your rights, that is, the financial or monetary interest that the owner or owner of the property has in the purpose of the insurance. The mere fact that it could be detrimental to it if a loss resulted from its financial participation in those assets gives it the opportunity to insure the property. The amount of compensation shall be directly proportional to the damage suffered. The insurance company pays up to the amount of damage suffered or the amount of insurance agreed in the contract, whichever is lower. For example, if your car is used for $10,000, but the damage is only $3,000.
You will receive $3,000, not the full amount. You must take all necessary measures to limit the loss when it occurs. You must take all necessary precautions to avoid loss even after taking out the insurance. This is the principle of minimization of losses. This principle states that the (insured) person must have an insurable interest in the subject matter. Insurable interest means that the article for which the person enters into the insurance contract must bring the insured a certain financial gain and also result in a financial loss if it is damage, destruction or loss. #3 IndemnificationCompensation is the value of the damage payable by the insurance company, the value of which must not exceed the value of the damage suffered. Insurance offers benefits to individuals and organizations in a number of ways. Some of the benefits are explained below: The principle of compensation states that insurance only covers you for the harm that has occurred. The insurer will carefully check and calculate the damage. The main reason for this principle is to put yourself in the same financial situation as before the loss. However, this principle does not apply to life insurance and critical health insurance.
Simply put, insurance is a contract, a legal agreement between two parties, that is, the person designated as insured and the insurance company called the insurer. In this agreement, the insurer promises to help with the insured`s losses on the possibility of passage. The insured, on the other hand, pays a premium in exchange for the insurer`s promise. The basic principle is that both parties to an insurance contract must act in good faith towards each other, i.e. You must provide clear and concise information about the terms of the contract. Then one day, an accident happens and damages or destroys your car. The total amount of compensation you receive according to this insurance principle is: #6. ContributionContribution is if the purpose of your coverage is insured with several insurance companies.
There will therefore be a contribution to the protection of each of the insurance companies. This is the principle of contribution. Each policy you have on the same subject pays its share of the loss suffered by the policyholder. This is an extension of the principle of compensation that allows proportional liability for all insurance coverage on the same subject. Depending on the coverage, life insurance can be divided into the following types: Recourse means that one party intervenes for another. In the context of insurance, a remedy arises if you are injured by a negligent third party and your insurance company reimburses you for your damages. Depending on the recourse principle, your insurance company can put itself in your shoes and claim payment from the negligent party. The objective of this principle is to promote responsibility and accountability by holding negligent parties accountable for the violations they cause.
As the holder of an insurance policy, you are required to take the necessary steps to minimize the loss of your insured property. The law does not allow you to be negligent or irresponsible simply because you know you are insured. For example, if a fire breaks out in your kitchen, you must take reasonable steps to extinguish it, such as using a fire extinguisher or calling the fire department. You can`t just sit back and let the fire burn your house because you know insurance will pay for it. This can lead to litigation if you`ve experienced an incident that you thought was covered, but your insurer says that`s not the case. Insurance companies want to make sure they protect themselves, but sometimes they can use it to avoid being responsible for a situation. This can be a dispute where you need a lawyer to help you argue on your behalf. The principle of compensation ensures that an insurance contract protects you against damage, loss or injury and compensates you. The purpose of an insurance contract is to make you “whole” in the event of a claim, not to allow you to make a profit. Therefore, the amount of your compensation for a loss is directly related to the amount of the loss you actually suffered. This principle comes into play when damages are due to another person/party and not to the insured. In such a case, the insurance company has the legal right to obtain that part for collection.
This article will read in detail about the importance of insurance, the principles of insurance, benefits and types of insurance. This principle can be a bit confusing, but the example should help clarify it. The remedy replaces one creditor (the insurance company) with another (another insurance company representing the person responsible for the claim). Although this is an important factor in all types of insurance, this principle is not used in life insurance. This is a very fundamental and primary principle of insurance contracts, because the type of service is that the insurance company provides a certain level of security and solidarity to the life of the insured. However, the insurance company should also pay attention to anyone looking for a way to scam them to get free money. Therefore, each party is expected to treat each other in good faith. When you buy your insurance policies, you`ll likely go through a process of choosing which cases you and your belongings are insured for and which are not. Here you select the immediate causes covered. If you find yourself in an incident, the immediate cause must be investigated so that the insurance company confirms that you are insured for the incident. Let`s understand each insurance principle with an example. Defining an insurance contract can be very advantageous if you are negotiating or deciding whether you need a lawyer in your personal injury case.
There are seven basic principles that create an insurance contract between the insured and the insurer: Life Insurance – The insurance policy where the policyholder (insured) can grant financial freedom to his family members after his death. It provides for financial compensation in the event of death or disability. The double insurance policy is accepted if the financial situation of the insurer is doubtful. The insured cannot claim more than the actual damage and cannot claim the full amount from both insurers. This is a fundamental principle of insurance. According to this principle, you must honestly disclose all risk-related information to the insurance company. Presented in the form of a policy, insurance is a contract in which the person or company receives financial protection, that is, the reimbursement by the insurance company of damage (large or small) caused to its property.