What is the Insurance? types of principles of Insurance?
Answers
an aggrement with a company in which you pay them regularly amount of money and they agree to pay the cost
Explanation:
Insurance :- It is an risk transfer mechanism nhh insurer gave the guarantee to the insured person for providing compensation in the case of any damages which caused stated in insurance policy . Because it is an also agreement in which insurer taking the risk and the insured will pay the certain amount as consideration which can be called as Premium.
7 Types of Principles of Insurance ,:-
1) Principle of utmost good faith :-
According to this principle,the insurer who is giving the policy must be disclase the all important facts and information which is related to that policy means disclosure the all terms and conditions and the insured person who is taking the policy he must be provide correct details and all material facts which is very important for that policy .They must be trust to each other .
2)Principle of indeminity :-
According to this principle,the insurer will compensate the loss of insured person but he can pay the actual amount of loss or amount of insurance policy whichever is lower .The main purpose of this principle is insured person will be come back at the same position before occurring the loss .
3)Principle of subrogation :-
According to this principle,The insurer have special right for recovery the loss from the third party who is actually liable for the loss of insured person. In other way insurer can take the ownership on that subject matter after compensating the insured person .
4) Principle of insurable interest :-
According to this principle,if any other person except insured person occurring the any financial loss due to mishappening with that subject matter which is insured so that other person can get claim from the insurance company because he has insurable interest on that subject matter which is insured .
5) Principle of contribution:+
According to this principle,Insured can buy the many insurance policy from the different companies of the same subject matter and for the same time period but at the time of loss he can claim the loss of amount from the companies in proportionate value.
6) Principle of mitigation of loss :-
According to this principle,Insured person must be do some efforts for minimizing the loss of that subject matter but if he does not take any steps so insurer can cancel the aggrement and can refuse for the giving policy amount .
7) Principle of proximate cause :-
According to this principle, the subject matter is damaged by any cause which is not stated in insurance policy so insurer can refuse .That immediate cause will be consider and that must be stated in insurence policy .