Page 21 - Mega Digi Page: General Awareness - Jan 2016
P. 21
www.bankersguru.org
(General Awareness)
Utmost Good Faith –
Both the parties i.e. insured and the insurer should a good faith towards each other. The
insurer must provide the insured complete, correct and clear information of subject
matter.
The insurer must provide the insured complete, correct and clear information regarding
terms and conditions of the contract.
This principle is applicable to all contracts of insurance
Insurable Interest –
The insured must have insurable interest in the subject matter of insurance.
In life insurance it refers to the life insured.
In fire and general insurance it must be present at the time of taking policy and also at
the time of the occurrence of loss.
The owner of the party is said to have insurable interest as long as he is the owner of it.
It is applicable to all contracts of insurance.
Principle of Indemnity
Indemnity means a guarantee or assurance to put the insured in the same position in
which he was immediately prior to the happening of the uncertain event.
The insurer undertakes make good loss.
Under this the insurer agrees to compensate the insured for the actual loss suffered.
Principle of Contribution
The principle is a corollary of the principle of indemnity.
It is applicable to all contracts of indemnity.
Under this principle the insured can claim the compensation only to the extent of actual
loss either from any one insurer or all the insurers.
Principle of Subrogation As per this principle after the insured is
compensated for the loss due to damage to property insured, then the right of ownership
of such property passes on to the insurer. This principle is corollary of the principle of
indemnity and is applicable to all contracts of indemnity.
Principle of loss Minimization
Under this principle it is the duty of the insured to take all possible steps to minimize
the loss to the insured property on the happening of uncertain event.
PrinciPle of ‘cAUSA ProXiMA’
The loss of insured property can be caused by more than one cause in succession to
another. The property may be insured against some causes and not against all causes.
In such an instance, the proximate cause or nearest cause of loss is to be found out.
If the proximate cause is the one which is insured against the insurance company is
bound to pay the compensation and vice versa.
Date of Release -27-Jan-16 SUBJECT: GA www.bankersguru.org
(General Awareness)
Utmost Good Faith –
Both the parties i.e. insured and the insurer should a good faith towards each other. The
insurer must provide the insured complete, correct and clear information of subject
matter.
The insurer must provide the insured complete, correct and clear information regarding
terms and conditions of the contract.
This principle is applicable to all contracts of insurance
Insurable Interest –
The insured must have insurable interest in the subject matter of insurance.
In life insurance it refers to the life insured.
In fire and general insurance it must be present at the time of taking policy and also at
the time of the occurrence of loss.
The owner of the party is said to have insurable interest as long as he is the owner of it.
It is applicable to all contracts of insurance.
Principle of Indemnity
Indemnity means a guarantee or assurance to put the insured in the same position in
which he was immediately prior to the happening of the uncertain event.
The insurer undertakes make good loss.
Under this the insurer agrees to compensate the insured for the actual loss suffered.
Principle of Contribution
The principle is a corollary of the principle of indemnity.
It is applicable to all contracts of indemnity.
Under this principle the insured can claim the compensation only to the extent of actual
loss either from any one insurer or all the insurers.
Principle of Subrogation As per this principle after the insured is
compensated for the loss due to damage to property insured, then the right of ownership
of such property passes on to the insurer. This principle is corollary of the principle of
indemnity and is applicable to all contracts of indemnity.
Principle of loss Minimization
Under this principle it is the duty of the insured to take all possible steps to minimize
the loss to the insured property on the happening of uncertain event.
PrinciPle of ‘cAUSA ProXiMA’
The loss of insured property can be caused by more than one cause in succession to
another. The property may be insured against some causes and not against all causes.
In such an instance, the proximate cause or nearest cause of loss is to be found out.
If the proximate cause is the one which is insured against the insurance company is
bound to pay the compensation and vice versa.
Date of Release -27-Jan-16 SUBJECT: GA www.bankersguru.org
