6. Savita, Rani and Chulbul do wholesale trade in readymade garments. They got
their godown insured for Five Lac only by "Bajaj Allianz General Insurance
Co. A lew days after getting the insurance the godown daught fire and the
goods worth Three Lac only were destroyed. They succeeded in gelung
compensation of their loss from the Insurance Co. the fimm sold off the half
burnt goods and got 20.000 only. Who will be the claimant of this amount
the firm or the Insurance Co.? Also explain the principle of insurance
applicable here in this case?
FLEBIH
Answers
Explanation:
What is Insurance?
Represented in a form of policy, Insurance is a contract in which the individual or an entity gets the financial protection in other words reimbursement from the insurance company for the damage (big or small) caused to their property.
The insurer and the insured enter a legal contract for the insurance called the insurance policy that provides financial security from the future uncertainties.
In simple words, insurance is a contract, a legal agreement between two parties, i.e., the individual named insured and the insurance company called insurer. In this agreement, the insurer promises to help with the losses of the insured on the happening contingency. The insured, on the other hand, pays a premium in return for the promise made by the insurer.
The contract of insurance between an insurer and insured is based on certain principles, lets us know the principles of insurance in detail.
Principles Of Insurance
The concept of insurance is risk distribution among a group of people. Hence cooperation becomes the basic principle of insurance.
To ensure the proper functioning of an insurance contract, the insurer and the insured have to uphold the 7 principles of Insurances mentioned below:
Utmost Good Faith
Proximate Cause
Insurable Interest
Indemnity
Subrogation
Contribution
Loss Minimization
.
Explanation:
What Is Insurance?
Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients' risks to make payments more affordable for the insured.
Insurance policies are used to hedge against the risk of financial losses, both big and small, that may result from damage to the insured or her property, or from liability for damage or injury caused to a third party.
How Insurance Works
There is a multitude of different types of insurance policies available, and virtually any individual or business can find an insurance company willing to insure them—for a price. The most common types of personal insurance policies are auto, health, homeowners, and life. Most individuals in the United States have at least one of these types of insurance, and car insurance is required by law.
The 7 Principles of Insurance
Utmost Good Faith.
Insurable Interest.
Proximate Cause.
Indemnity.
Subrogation.
Contribution.
Loss Minimization