INSURANCE

CONTRACT
BY: PAULA MARTÍN SOTO
CONTENT

1.Concept and general rules

2.Personal elements

3.Formal elements

4.Obligations of the parties

5. Duration of the contract.

Presciption

6. The policy
 1. WHAT IS AN INSURANCE
CONTRACT?
Regulation:
Article 1 of the previously mentioned Law already It is regulated by Law
50/1980, of October 8, on the
defines it as: a contract by which the insurer is Insurance Contract.
obliged, against payment of a premium and in case
of occurrence of the insured event, to compensate, Other that we have: Law
20/2015 of July 14, on the
within the agreed limits, the damage caused to the organization, supervision
insured or to satisfy a capital, an income or other and solvency of insurance
and reinsurance entities.
agreed benefits

This contract is
Bilateral
Onerous
Aleatory
Adhesion
Commercial
2. PERSONAL ELEMENTS
Insurer Insured Policyholder Beneficiary
The insurer is the company Is the owner of
Person who Is a third party in
that agrees to bear the risk contracts the favor of which the
the interest
and indemnify the damage in insurance and signs insurance is
covered by the
exchange for a price. the policy with stipulated and,
insurance, that is,
Only by private entities that him/her. It usually therefore, is
the person who is
adopt the form of public contacts with his entitled to receive
threatened by a
company or entities governed own account, compensation.
risk and wants to assuming the legal
by public law whose purpose This party is chosen
take cover from it position. by the policyholder,
is to carry out insurance in an
through It can also happen being the decision
equivalent way was the
insurance. that he does it on revocable at any
private ones.
behalf of other time. Unless it is
person. estipulated
otherwise in the
writing.
 3. FORMAL ELEMENTS
Risk Interest The insurance premium

Essential element of the The object of the insurance is

contract, understood as
the possibility of a
harmful event
occurring. So, the
contract will be void if,
once it is concluded,
there is no risk or it has
already occurred.
the interest that the insured
has in the asset exposed to
risk. It is the existing economic
relationship between a subject
and a good, which has a value
whose decrease or loss must
be compensated by insurance
compensation.
The premium is the
consideration paid by the
policyholder or the insured for
the transfer of risk to the
insurer. It is also considered an
essential element of the
contract, so that there will be
no insurance if the premium is
not paid.

The causal element of the risk excludes For an interest to be insurable, it

the possibility of insuring risks that fall
on an illegal activity or on interests
contrary to the law, morality or public
order, as well as those caused by bad
faith on the part of the insured.
must meet the following
characteristics: be subjective,
have an economic-patrimonial
value and be lawful. The lack of
interest generates the nullity of
the insurance
4. OBLIGATIONS OF THE PARTIES
It includes the rights and obligations of each of the parties during the
different phases of the life of the insurance.

Obligations of the policyholder

Duty to Inform
declare the Premium about other
insurance
risk payment
 Obligations of the insurer

Offer a Duty of
Damage information,
guarantee
compensation and deliver
against risk
the policy
5. DURATION OF THE CONTRACT
AND PRESCRIPTION
The law does not set the duration of the insurance contracts,
leaving this issue to the discretion of the parties, but
requiring, instead, that it be stated in the policy.

Generally, the duration of the contract is divided into equal

periods of time, each of which corresponds to the payment
of a premium.

Article 22 establishes a maximum term of 10 years applicable

to all types of insurance with the exception of life insurance.
Once the term of a contract has ended, it may be extended
one or more times for a period of time not exceeding one
year at a time, if expressly stated.
What about the prescription?
The actions derived from the insurance
contract will prescribe after 2 years if it
is damage insurance and 5 years if it is
personal insurance (art. 23). These
terms will begin to be counted from the
moment they could be exercised. About
the interruption of the prescription,
the provisions of article 944 of the
Commercial Code will apply.
Articule 944 of the Code of
Commerce says:
The prescription will be
interrupted by the demand
or any other kind of judicial
interpellation made to the
debtor; by the recognition of
the obligations, or by the
renewal of the document on
which the right of the
creditor is based.
6. The policy
The policy is the most
important document of this
contract. Collect the
conditions of the contract,
whether general or special.

It contains multiple copies: one for each party and another

to deliver to the agent who intervened in the contract.
Fulfills an evidentiary function of the existence and
content of the contract. Also fulfills a normative function
The policyholder has one month from the delivery of the Must contain: name
of the company,
policy to claim the insurer the correction of existing
nature of the risk,
discrepancies. designation, amount
of premium,
duration...