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The Indian insurance law is the product of various legislations made on the basis of the English law of insurance. The expansion of the insurance business in different fields prompted the enactment of Indian Life Assurance Companies Act, 1912 based on the English Act of 1909 to deal with life insurance business. In other words, in the initial stages, the insurance business was governed by the provision of the Companies Law. Later a draft bill was introduced with an aim to consolidate the laws of insurance, applicable to all the types of insurance business. But, the bill was not passed for various reasons. The Insurance Companies Act 1928 was drafted on the guidelines of the bill that was tabled earlier in England. But, it did not have sufficient regulations and provisions to meet the needs and control the insurance business. The ‘ever increasing’ nature of the insurance business, particularly the life insurance and some general insurance fields, were warranted. The need to have one comprehensive Act, to govern all the multifarious insurance forms of business. The general insurance business is fundamentally covered by the provision of the Insurance Act, 1938, and some special contracts are governed by different acts such as Marine Insurance Act, 1963, Public Liability Act, 1991, and Motor Vehicle Act, 1988. Most of the provisions of the Insurance Act, 1938 are applicable to the Life Insurance Contract and in addition to those provisions the provisions of the Life Insurance Act, 1956 are also applicable to the life insurance business.
INSURANCE CONTRACT The insurance mechanism has two fundamental characteristics; shifting or transferring of risk of loss or damage, from owners and thereby sharing of losses by all the members of the group. Thus a contract of insurance is a contract by which one party undertakes to make good the loss of another, in consideration of a sum of money, on the happening of specified event. For example, fire accident or death. The offer acceptance communication and consideration are very important elements of the contract. Apart from this the other important elements are the intention of
the party to create the legal relationship, the capacity of the parties to enter into a contract, free consent of the parties who enter into such legally binding contract (‘consensus ad idem’), its certainty and possibility of performance and lastly the said contractual agreement entered into by both the parties. Both the parties should not be declared void under the act and also should not have been forbidden by any law of the land. “All agreements are contracts if they are made by free consent of the parties, competent to contract, for a lawful consideration and with a lawful object and which are not hereby declared to be void.” The insurance contract involves – a) The element of general contract, b) The elements of special contract relating to insurance. a) The element of general contract i. Agreement (offer & acceptance): ii. Legal consideration. iii. Competent to make contract. iv. Free consent. v. Legal object. b) The elements of special contract of insurance involves principles: 1) Insurable Interest. 2) Utmost Good Faith. 3) Indemnity. 4) Subrogation 5) Proximate Cause 6) Contribution 7) Warranties. 1. INSURABLE INTEREST: For an insurance contract to be valid, the insured must posses an insurable interest in the subject matter of insurance. The insurable interest is the pecuniary interest whereby the policy-holder is benefited by the existence of the subject-matter and is prejudiced by the death or damage of the subject-matter. The essential of a valid insurable interest are the following:
There must be a subject-matter to be insured. The policy-holder should have monetary relationship with the subject-matter. The relationship between the policy-holders and the subject-matter should be recognized by law. The financial relationship between the policy-holders and subject-matter be such that the policy0holder is economically benefited by the survival or existence of the subject-matter and/or will suffer economic loss at the death or existence of the subjectmatter. When a person fulfils the above criteria or when a person has such a relationship with the subject-matter, it is said that he has insurable interest and it is only then that he can insure. WHEN INSURABLE INTEREST EXISTS Insurable interest exists in the following cases: I. Owners: Owners have got insurable interest to the extent of full value. II. Part owners or joint owners: They have insurable interest to the extent of their part or financial interest. III. Mortgagor/Mortgagee: Mortgagor, being the owner of the property, has got insurable interest. Mortgagee though not owner, has got insurable interest to the extent of the money advanced, plus interest and an amount to cover up insurance premium. IV. Ballees: They have got insurable interest because of a potential liability being created if goods belonging to others get lost or damaged whilst in their custody. V. Carries: Like bailees, carries have also got insurable interest in view of potential liability that might devolve on them for any mishap to the goods belonging to others, but whilst in their custody. VI. Administrator, Executors & Trustee: They have insurable interest in view of responsibility put on them by law. VII. Life: A person has got insurable interest in his own life. A husband has also got insurable interest in the life of his wife and vice-versa. No other relationship as such merits existence of insurable interest. However, insurable interest has been created up to $30 on the lives or parents, step-parents and grand-parents, under the Industrial Assurance & Friendly Societies Act, 1984 & 1958 of U.K., for funeral expenses.
VIII. Debtors and Creditors: A debtor has insurable interest in his own life, but he has no insurable interest in the life of his Creditor. A creditor on the other hand has insurable interest in his own life and he has also insurable interest in the life of his debtor to the extent of the loan, interest and something to cover up premium. This is because of the financial interest being created by advancing money. IX. Insurers: They have got insurable interest because of a potential liability undertaken from the insured under a policy, and this justifies taking out a reinsurance policy. X. Liability: The creation of a potential liability justifies existence of insurable interest. The best examples are third party motor insurance, public liability insurance etc. It should be remembered that a person in the lawful possession of goods of another has got insurable interest so long responsible for goods. More possession without responsibility does not carry any insurable interest. Similarly a person having illegal possession of goods has got no insurable interest, e.g., thieve. One important point with regard to insurable interest is that it must be capable of being valued in terms of money. Sentimental value is co criteria. WHEN INSURABLE INTERST MUST EXIST When insurable interest must exist varies depending on the type of insurance. The position is as follows: Marine: Insurable interest must exist at the time of claim although. It need not exist at the time of effecting the policy. Fire: Insurable interest must exist both at the time of affecting the policy and at the time of claim. Life: Insurable interest must exist at the time of affecting the policy and it may not exist at the time of claim. Accident: Like fire, insurable interest must exist both at the time of affecting the policy and the time of claim. 2. UTMOST GOOD FAITH: The doctrine of disclosing all material facts in embodied in the important principle ‘utmost good faith’ which applies to all forms of insurance. Both parties of the insurance contract must be of the same mind (ad item) at the time of contract. There should not be any misrepresentation, non-disclosure or fraud
concerning the material facts. An insurance contract is a contract of uberrimae fidei, i.e., of absolute good faith where both parties of the contract must disclose all the material facts truly and fully. Material Facts A material fact is one which affects the judgment or decision of both parties in entering to the contract. Facts which count materially are those which knowledge influences a party in deciding whether or not to offer or to accept such risk and if the risk is acceptable, on what terms and conditions the risk should be accepted. In case of life insurance, the material facts or factors affecting the risk will be age, residence, occupation, health, income etc, and in case of property insurance, it would be use, design, owner and situation of the property. Full and True Disclosure The utmost Good Faith says that all the material facts should be disclosed in true and full form. It means that the facts should be disclosed in that form in which they really exist. There should be no concealment, misrepresentation, mistake or fraud about the material facts. There should be no false statement and no half truth nor any silence on the material facts. Duty of Both the Parties The duty to disclose the material facts lies on both the parties, the insured as well as the insurer. FACTS WHICH ARE REQUIRED TO BE DISCLOSED The following facts are required to be disclosed: (a) Facts which would render a risk greater than normal. In the absence of this information the insuree would consider the risk as normal and deceived. (b) Facts which would suggest some special motive behind insurance, e.g., excessive over-insurance. (c) Facts which suggest the abnormality of the proposer himself e.g., making frequent claims. (d) Facts explaining the exceptional nature of the risk. FACTS NEED NOT BE DISCLOSED BY THE INSURED The following facts, however, are not required to be disclosed by the insured: I. Facts which tend to lessen the risk. II. Facts of public knowledge. III. Facts which could be inferred from the information disclosed.
IV. Facts waived by the insurer. V. Facts government by the conditions of the policy. 3. PRINCIPLE OF INDEMNITY: Insurance is usually a contract of indemnity. The insurer agrees to pay for actual loss suffered by the insured, and no more. The purpose of the contact is to shift the burden of risk from the insured to the insurer. So, according to this principle, the insurer undertakes to put the insured, in the event of loss, in the same position that oct45grcupied immediately before the happening of the event insured again. USES: To avoid intentional loss: According to the principle of indemnity insurer will pay the actual loss suffered by the insured. If there is any intentional loss created by the insured the insurer’s is not bound to pay. The insurer’s will pay only the actual loss and not the assured sum (higher is higher in over-insurance). To avoid an Anti-social Act: If the assured is allowed to gain more than the actual loss, which us against the principle of indemnity, he will be tempted to gain by destruction of his own property after it insured against a risk. So, the principle of indemnity has been applied where only the cash-value of his loss and nothing more than this, through he might have insured for a greater amount, will be compensated. To maintain the Premium at Low-level: If the principle of indemnity is not applied, larger amount will be paid for a smaller loss and this will increase the cost of insurance and the premium of insurance will have to be raised. If premium in raised two things may happen – First, persons may not be inclined to insure and Second, unscrupulous persons would get insurance to destroy he property to gain from such act. CONDITIONS OF INDEMNITY PRINCIPLE: The following conditions should be fulfilled in full application of principle of indemnity. The insured has to prove that he will suffer loss on the insured matter at the time of happening the event and the loss is actual monetary loss. The amount of compensation will be the amount of insurance. Indemnification cannot be more than the amount insured.
If the insured gets more amount then the actual loss; the insurer has right to get the extra amount back. If the insured gets more amount then from third party after being fully indemnified by insurer, the insurer will have right to receive all the amount paid by the third party. The principle of indemnity does not apply to personal insurance because the amount of loss is not easily calculable there. METHODS OF PROVIDING INDEMNITY: There are various ways through which indemnity may be provided. These are: Cash payment: This is the usual way of making payment of a claim. This method is simpler, easier and less cumbersome. Repair: This is also another way of providing compensation. Rather than making cash payment, the insurers will get the loss repaired to pre-loss condition as practicable. Replacement: Usually in case of total loss the insurers may replace the subjectmatter by another one of the same standard, age & quantity. Reinstatement: The insurers may also reinstate the property by option. This is usually considered with regard to buildings damaged or destroyed by fire. 4. DOCTRINE OF SUBROGATION: The principle of indemnity is also implemented by the principles of subrogation. This principle gives the insurance company whatever right against third parties the insured may have as a result of the loss for which the insurer paid him. So, the doctrine of subrogation refers to the right of the insurer to stand in the place of the insured, after settlement of a claim, in so far as the insured’s right of recovery from an alternative source is involved. ESSENTIALS OF DOCTRINE OF SUBROGATION Corollary to the Principle of Indemnity: If the damaged property has any value left, or any right against a third party the insurer can subrogate the left property or right of the property because it the insured is allowed to retain, he shall have realized more than the actual loss, which is contrary to principle of indemnity. Subrogation is the Substitution The insurer, according to this principle, becomes entitled to all the rights of insured subject-matter after payment because he has paid the
actual loss of the property. He is substituted in place of other persons who act on the right and claim of the property insured. Subrogation only up to the amount of payment The insurer is subrogated all the rights, claim, remedies and securities of the damaged insured property after indemnification, but he is entitled to get these benefits only to the extent of his payment. The Subrogation may be applied before payment If the assured got certain compensation from third party before being fully indemnified by the insurer can pay only the balance of the loss. Personal Insurance The doctrine of subrogation does not apply to personal insurance because the doctrine of indemnity is not applicable to such insurance. The insurer has no right of action against the third party in respect of the damages. HOW THIS RIGHT OF SUBROGATION ARISES As already indicated, right of subrogation arises in the following ways: Under tort This is a wrongdoing to another. A person cannot be wrong to another thereby causing damage to another’s property of inflicting injury to the person of that another. If it is so done then a right of action accrues in favor of the wronged and to the determent of the wrong-doer. Under contract A contract may put some obligation on the person making breach of the contract to compensate the person who has been aggrieved as a result of the breach. As for example, obligation under contract of afferightment and contract of bailment etc. Under statute Statutes may also create liability, for making compensation, arising out of a breach thereof. Examples are, Factories Act, Occupies Liability Act, The Riot Act, and Carriage of Goods by Sea Act etc. 5. PROXIMATE CAUSE The rule is than immediate and not the remote cause in to be regarded. The maxim is sed causa proxima non-remote spectature i.e., see the proximate cause and not the distant cause. The real cause must be seen while payments of the loss. If the real cause of loss is insured, the insurer is liable to compensate the loss; otherwise the insurer may not be responsible for loss. So, Proximate cause means the active efficient cause that acts in motion a rain of events which brings about result, without intervention of any force started and working activity from a new and independent source.
DETERMINATION OF PROXIMATE CAUSE The determination of real cause depends upon the working and practice of insurance & circumstances to loss. Also1. If there is a single cause of the loss, the cause will be the proximate cause and further if the peril (cause of loss) was insured insurer will have to indemnify the loss. 2. If there are concurrent causes, the insured perils and excepted perils have to be segregated. The concurrent causes may be first, separable and second, inseparable. Separable causes as those which can be separated from each other. The loss occurred due to a particular cause may be distinguishing known. If the circumstances are such that the perils are inseparable, then the insurers are not liable at all when there exists any excepted peril 3. If the causes occurred in form of chain, they have to be observed seriously-a) If there is unbroken chain the excepted and insured perils have to be separated. If an excepted peril precedes the operation of the insured peril so that the loss cause by the latter is the direct and natural consequences of the excepted peril, there is no liability. b) If there is a broken chain of events with no excepted peril involved, it is possible to separate the losses. The insurer is liable only for that loss which caused by an insured peril; where there is an excepted peril, the subsequent loss caused by an insured peril will be a new and indirect cause because of the interruption in the chain of events. 6. PRINCIPLE OF CONTRIBUTION: Contribution is a right that an insurer has, who has paid under a policy, of calling other interested insurers in the loss to pay or contribute ratably to the payment. This means that if at the time of loss it is found that there is more than one policy covering the same loss then all policies should pay the loss proportionately to the extent of their respective liabilities so that the insured does not get more than one whole loss from all these sources. If a particular insurer pays the full loss than that insurers shall have the right to call all the interested insurers to pay him back to the extent of their individual liabilities, whether equally or otherwise. CONDITIONS/WHEN CONTRIBUTION OPERATES Before contribution can operate the following conditions must be fulfilled: There must be more then one policy involved and all policies covering the loss must be in force.
II. All the policies must cover the same subject-matter. If all the policies cover the same insured but different subject-matters altogether then the question of contribution would not arise. III. All the policies must cover the same peril causing the loss. If the policies cover different perils, some common and some uncommon, and if the loss is not caused by a common peril, the question of contribution would not arise. IV. All the policies must cover the same interest of the same insured. It should be remembered that if any of the above four factors is not fulfilled, contribution will not apply. 7. WARRANTIES: There are certain conditions and promises in the insurance contract which are called warranties. A warranty is that by which the assured undertakes that some particulars thing shall or shall not be done, or that some conditions shall be fulfilled, or whereby he affirms or negatives the existence of a particular state of facts. Warranties which are mentioned in the policy are called express warranties. There are certain warranties which are not mentioned in the policy. These warranties are called express warranties. TYPES OF INSURANCE Any risk that can be quantified probably has a type of insurance to protect it. Among the different types of insurance are: 1. Life Insurance: This is a contract by which the insurer in consideration at a certain premium either in a gross sum or periodical payments undertakes to pay the person for whose benefit the insurance is made, stipulated sum, of annuity equivalent, upon the death of the person whose life is insured. Life insurance provides a cash benefit to a decedent's family or other designated beneficiary, and may specifically provide for burial and other final expenses. 2. General Insurance: With the awareness in the general insurance, the insurance business has developed by leaps and bounds after independence. The growth of a general insurance is also directly proportional to the economic growth of the country. As a result, after independence, a number of companies have come into the business of general insurance with an objective to earn profits.
Fire insurance: The fire insurance contracts are the contracts covering the
risk of the fire. They insure that risk of laws caused either by fire or incidental to fire. Thus fire insurance policies cover the insurance business in which the risk to the asset is from fire or incidental to fire. 4. Marine Insurance: The law of marine insurance was enacted in the year 1963, in India. The Act is based on the English Marine Insurance Act. The Marine Insurance law developed in its full form from that date and removed some of the difficulties faced by the courts, while defining insurable interest, over good faith and other important concepts of the insurance business. It is an agreement whereby the insurer undertakes to indemnify the assured, in the manner and to the extent thereby agreed, against marine losses, that is to say, the losses incidental to marine adventure section (3). It also includes liability to a third party included by the owner of the ship or other person interested in the property assured on happening of the maritime event. These maritime peril or event of risk is consequent on or incidental to, the navigation of the sea, that is to say perils of the seas, fire, war perils, pirates, and rovers thieves, capturers, seizures, restraints, and detainments of princes and peoples, jettison, barratry, and any other perils which are either of the like kind or may be designed. Other types are as follows: 1. Automobile insurance: This is also known as auto insurance, car insurance and in the UK as motor insurance, is probably the most common form of insurance and may cover both legal liability claims against the driver and loss of or damage to the vehicle itself. Over most of the United States purchasing an auto insurance policy is required to legally operate a motor vehicle on public roads. Recommendations for which policy limits should be used are specified in a number of books. In some jurisdictions, bodily injury compensation for automobile accident victims has been changed to No Fault systems, which reduce or eliminate the ability to sue for compensation but provide automatic eligibility for benefits. 2. Boiler insurance (also known as Boiler and Machinery insurance or Equipment Breakdown Insurance) Casualty insurance insures against accidents, not necessarily tied to any specific property.
3. Credit insurance pays some or all of a loan back when certain things happen to the borrower such as unemployment, disability, or death. Financial loss insurance protects individuals and companies against various financial risks. For example, a business might purchase cover to protect it from loss of sales if a fire in a factory prevented it from carrying out its business for a time. Insurance might also cover failure of a creditor to pay money it owes to the insured. Fidelity bonds and surety bonds are included in this category. 4. Health insurance covers medical bills incurred because of sickness or accidents. 5. Liability insurance covers legal claims against the insured. For example, a homeowner's insurance policy provides the insured with protection in the event of a claim brought by someone who slips and falls on the property, and brings a lawsuit for her injuries. Similarly, a doctor may purchase liability insurance to cover any legal claims against him if his negligence (carelessness) in treating a patient caused the patient injury and/or monetary harm. The protection offered by a liability insurance policy is two-fold: a legal defense in the event of a lawsuit commenced against the policyholder, plus indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. 6. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies and regulated as insurance. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance. 7. Total permanent disability insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance. 8. Locked Funds Insurance is a little known hybrid insurance policy jointly issued by governments and banks. It is used to protect public funds from tamper by unauthorised parties. In special cases, a government may authorize its use in protecting semi-private funds which are liable to tamper. Terms of this type of
insurance are usually very strict. As such it is only used in extreme cases where maximum security of funds is required. 9. Nuclear incident insurance - damages resulting from an incident involving radioactive materials is generally arranged at the national level. (For the United States, see Price-Anderson Nuclear Industries Indemnity Act.). 10. Political risk insurance can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss. 11. Professional Indemnity Insurance is normally a mandatory requirement for professional practitioners such as Architects, Lawyers, Doctors and Accountants to provide insurance cover against potential negligence claims. Non licensed professionals may also purchase malpractice insurance, it is commonly called Errors and Omissions Insurance and covers a service provider for claims made against them that arise out of the performance of specified professional services. For instance, a web site designer can obtain E&O insurance to cover them for certain claims made by third parties that arise out of negligent performance of web site development services. 12. Property insurance provides protection against risks to property, such as fire, theft or weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance. 13. Terrorism insurance: Title insurance provides a guarantee that title to real property is vested in the purchaser and/or mortgagee, free and clear of liens or encumbrances. It is usually issued in conjunction with a search of the public records done at the time of a real estate transaction. 14. Travel insurance is an insurance cover taken by those who travel abroad, which covers certain losses such as medical expenses, lost of personal belongings, travel delay, personal liabilities, etc. 15. Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expense incurred due to a job-related injury. KINDS OF INSURANCE.
Permanent life insurance: Permanent life insurance is a form of life insurance such as whole life or endowment, where the policy is for the life of the insured, the payout is assured at the end of the policy (assuming the policy is kept current) and the policy accrues cash value. This is compared with Term life insurance where insurance is purchased for a specified period (typically a year, or for level periods such as 5, 10, 15, 20 even 25 and 30 years) where a death benefit is only paid to the beneficiary if the insured dies during the specified period. Permanent life insurance originally was offered as a fixed premium fixed return product known as whole life insurance also known as cash surrender life insurance. This offered consumers guaranteed cash value accumulation and a consistent premium. Consumers later wanted more flexibility which was offered in the form of universal life insurance. Universal life insurance allows consumers flexibility in when premiums are to be paid and the amount that they would be. Universal life policies also allowed consumers to permanently withdraw cash from the policy without the interest associated with the loan provisions in whole life policies. Universal life policies retained the fixed investment performance of whole life policies. Variable life insurance follows the mold of whole or universal life, but it shifts the investment risk to the consumer along with the potential for greater returns. Variable universal life insurance combines this with the flexibility in premium structure of universal life to create the most free form option for consumers to manage their own money (at their own risk). Variable universal life insurance policies are considered more favorable to other permanent life insurance alternatives due to the favorable tax treatment of all permanent life insurance policies and their potential for greater returns than other permanent life insurance products. Whole life insurance/ Ordinary life insurance) Whole Life Insurance, or Whole of Life Assurance (in the Commonwealth), is a life insurance policy that remains in force for the insured's whole life and requires (in most cases) premiums to be paid every year into the policy. Health insurance :The term health insurance is generally used to describe a form of insurance that pays for medical expenses. It is sometimes used more broadly
to include insurance covering disability or long-term nursing or custodial care needs. It may be provided through a government-sponsored social insurance program, or from private insurance companies. It may be purchased on a group basis (e.g., by a firm to cover its employees) or purchased by individual consumers. In each case, the covered groups or individuals pay premiums or taxes to help protect themselves from high or unexpected healthcare expenses. Similar benefits paying for medical expenses may also be provided through social welfare programs funded by the government. By estimating the overall risk of healthcare expenses, a routine finance structure (such as a monthly premium or annual tax) can be developed, ensuring that money is available to pay for the healthcare benefits specified in the insurance agreement. The benefit is administered by a central organization, most often either a government agency or a private or not-for-profit entity operating a health plan. Group insurance: Group insurance is an insurance that covers a group of people, usually who are the members of societies, employees of a common employer, or professionals in a common group. Group insurance may or may not be converted to individual coverage. As group insurance gets big business for an insurance company with minimum operational expenses (under one master policy issued to an employer, union or any recognised group), it is usually less expensive than individual policies. Group coverage can help reduce the problem of adverse selection by creating a pool of people eligible to purchase insurance who belong to the group for reasons other than for the purposes of obtaining insurance. In other words, people belong to the group not because they possess some high-risk factor which makes them more apt to purchase insurance (thus increasing adverse selection); instead they are in the group for reasons unrelated to insurance, such as all working for a particular employer. Accidental death and dismemberment insurance: Accidental death and dismemberment insurance (also known as AD&D) is a form of insurance covering death or specific types of injury as a result of an accident. In the event of accidental death, this insurance will pay benefits in addition to any life insurance held. Death by illness, suicide, or natural causes is generally not covered by AD&D. Additionally,
AD&D generally pays benefits for the loss of limbs, fingers, sight and permanent paralysis. The types of injuries covered and the amount paid vary by insurer and package, and are explicitly enumerated in the insurance policy. Dental insurance: Dental Insurance in the United States is insurance designed to pay the costs associated with dental care. Dental insurance pays a portion of the bills from dentists, and other providers of dental services. By doing so, dental insurance protects people from financial hardship caused by unexpected dental expenses. Not all dentists are pleased about participating in any type of dental plan. It means more work for them (and especially more paperwork), and less pay. It is also important to have adequate coverage for your situation, so you can access the features you need and are not paying for something you will not use. Most group dental insurance plans do not have restrictions, such as pre-existing conditions but do have annual maximum payments. Pet insurance: Pet Insurance pays the veterinary costs if one's pet becomes ill or is injured in an accident. Some policies will also pay out when the pet dies, or if it's lost or stolen. The purpose of pet insurance is to mitigate the risk of incurring significant expense to treat ill or injured pets. As veterinary medicine is increasingly employing expensive medical techniques and drugs, and owners have higher expectations for their pets' health care and standard of living than previously, the market for pet insurance has increased. Terrorism insurance Terrorism insurance is insurance purchased by property owners to cover their potential losses and liabilities that might occur due to terrorist activities. It is considered to be a difficult product for insurance companies, as the odds of terrorist attacks are very difficult to predict and the potential liability enormous. For example the September 11, 2001 attacks resulted in an estimated $31.7 billion loss. This combination of uncertainty and potentially huge losses makes the setting of premiums a difficult matter. Most insurance companies therefore exclude terrorism from coverage in Casualty and Property insurance, or else require endorsements to provide coverage. Crop insurance: Crop insurance is purchased by agricultural producers, including farmers, ranchers, and others to protect themselves against either the loss
of their crops due to natural disasters, such as hail, drought, and floods, or the loss of revenue due to declines in the prices of agricultural commodities. The two general categories of crop insurance are called crop-yield insurance and crop-revenue insurance. Home insurance: Home insurance, also commonly called hazard insurance or homeowners insurance (often abbreviated in the real estate industry as HOI), is the type of property insurance that covers private homes. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one's home, its contents, loss of its use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home. It requires that at least one of the named insured occupies the home. The dwelling policy (DP) is similar, but used for residences which don't qualify for various reasons, such as non-occupancy or age. It is a multiple line insurance, meaning that it includes both property and casualty coverage, with an indivisible premium, meaning that a single premium is paid for all risks. Standard forms divide coverage into several categories, and the coverage provided is typically a percentage of Coverage A, which is coverage for the main dwelling. Property insurance: Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance. Property is insured in two main ways - open perils and named perils. Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism and war. Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damagecausing events as fire, lightning, explosion and theft. Vehicle insurance: Vehicle insurance (also known as auto insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, and other
vehicles. Its primary use is to provide protection against losses incurred as a result of traffic accidents and against liability that could be incurred in an accident. Wage insurance: Wage insurance is a form of proposed insurance that would provide workers with compensation if they are forced to move to a job with a lower salary. The idea is usually proposed as a response to outsourcing and the effects of globalization, although it could equally be proposed as a response to job displacement due to increasingly productive technology (e.g. factories, or computers). Economic consensus generally holds that in both cases -- the integration of the global economy through free trade, on one hand, and greater technological efficiencies, on the other -- the changes will have a net benefit across the world. However, economic theory also indicates that, while people over the aggregate will be better off, many individuals will not be able to keep their current job at their current wages. Those individuals may be able to retrain and move to more highly paid wages, and the reduced cost of goods (which is likely to result from either case under consideration) may offset at least some of the wage loss. These compensating effects are likely to take several years to come about, however, and some people might never be fully compensated by normal market mechanisms. Wage insurance would offer compensation in these situations. Mortgage insurance: It's more expensive than it's worth. Besides, you could do better with another policy -- one that you might already have. These policies are designed to make your mortgage payments if you die or become disabled. If you're worried about burdening your heirs with mortgage payments, you'd be better off buying straight life insurance. Adding on to your existing life insurance policy is less expensive than mortgage life.
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