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INSURANCE CONTRACT

Can you guys help? I want to insure my exgirlfriends life because she still owes me
money!
Ive changed my job working from project
coordinator to an engineer in coal mine do I
need to disclose it to my insurer.
My car destroyed in fire and whole scrap has
been taken away by strangers. Will I get theft
or fire claim.
Can I take claim from Insurance company or
the person responsible for loss or from both
Can I insure my car from three different
companies and seek the claim benefit? And
what about life insurance.

Written contract that transfers


risks/financial responsibility for losses up to
specified limits to an insurer for a money
payment called Premium.

A tool of Risk Transfer

Can all risks or peril is insurable?

Economic & Social Perspective

Offer
Acceptance
Consideration
Capacity To Contract
Free Consent
Legal Object

Uberrima fides or Utmost Good Faith


Insurable Interest
Indemnity
Subrogation and Contribution
Proximate Cause

Both parties to the contract are bound to


exercise good faith and do so by a full
disclosure of all information material to the
proposed contract.
Information about Material Facts
The insurers, who issue the contract
document, have the same duty to observe
good faith while issuing the policy and should
ensure that there is no ambiguity in the
contract wording.

Facts which are common knowledge


Facts of law
Facts which a survey can reveal
Facts about with insurance company has
waived further information (Principle of
waiver)

Insurance contracts without insurable


interests have no sanction of the law as
they amount to speculation.
By this principle, insurance interest exists
to other parties also like Debtor-Creditor,
employer-employee, Business partners etc.
Their interest is limited to the extent of
their financial commitment only.

In the case of life insurance policies,


insurable interest must exist at the inception
of the policy. There is no requirement for
insurable interest at the time of a claim
under the policy.
In the case of Gen. Insurance policies,
insurable interest must exist at the time of
the clam.

Indemnity means that the insured person is


placed, financially, in the same position, as
he was before the loss.
One can not make profit out of Claim.
This principle does not follow the Life
Insurance Contracts.

Contribution- Contribution condition is a corollary to


the Principle of indemnity. If an insured obtains more
than one policy covering the same risk, he cannot
recover the same loss from more than one source so
that he is not benefited by more than Indemnity.

Contribution condition checks that each policy pays


only a ratable portion under each separate policy.

When Contribution arise Two or more policies of indemnity must exist


The policy must cover common interest
Common peril
Common subject matter
Each policy must be liable for loss

Subrogation condition is another corollary to the


principle of Indemnity. A loss may occur accidentally
or by the action or negligence of third party . The
property owners have a right to proceed against the
offending third party to recover the loss/damage and
also under their insurance policy but not under both.
An exception to this are life insurance polices wherein
insured/ beneficiaries can claim under an insurance
policy and also proceed against the offending third
party.

When Subrogation arise Tort


Contract
Statute
Subject matter of Insurance

According to the principle of proximate cause


an insurance policy is designed to provide
compensation only for such losses as are
caused by the perils, which are stated in the
policy.
The liability of the insurer arises only if the
loss is caused by a peril, which is specifically
covered under the policy. However, the loss is
not payable if it is caused by a peril, which is
excluded under the policy or is not mentioned.

In life insurance, the doctrine of Causa


Proxima is not applied because the insurer is
bound to pay the amount of insurance
whatever may be the reason of death it may
be natural or unnatural. So this principle is
not of much practical importance in
connection with life insurance.
However, this principle is observed in life
insurance too in the following circumstances:

When the loss is the result of two or more


cause, operating simultaneously or one after
the other in succession, it becomes necessary
to ascertain what is known as the proximate
cause, which brought about the loss.

An army officer while visiting sentries


posted along the railway line was killed by a
passing train. The policy excluded death or
injury directly or indirectly caused by war
etc. The passing of the train was the
proximate cause of the accident, but the
indirect cause was war, for that was the
reason why the officer was present on the
railway line. In view of the words used in
the policy, the insurers were not liable.
(Coxe v Employer Liability Assurance
Corporation,1916)

Contingency..upon happening of an event


Aleatory.. unequal money exchange
Voluntary..parties act in good faith
Adhesive. Insurer provided wording
Executory..executed after payment of
anticipated loss
Personal.between 2 parties only