There are certain principles on which insurance functions in India. They are:
Utmost Good Faith: The customer and the insurance company should enter the agreement in utmost good faith. The customer should declare all the material information to the insurance company without holding any information that can affect the risk, while the insurance company or its representative should educate the customer regarding the terms and conditions of the insurance policy.
Insurable Interest: There should be proof of insurable interest at the time of taking the insurance policy. In simple words, the insured customer should suffer financially or mentally if the insured property is damaged.
Indemnity: The principle of insurance states that the insured will be placed in the same financial position as he/she was just before the occurrence of the loss. In simple words, the insurance company will pay only the claim amount to repair or replace the property and make sure that the property is in the same condition just before the occurrence of the loss. The principle of indemnity states that the insured customer cannot profit from the insurance.
Subrogation: The principle of subrogation states that the rights of the insured property would be transferred to the insurance company after the claim is paid. Once the claim is paid to the insured, the damaged property would be owned by the insurance company so that the insured cannot be benefited from both the claim amount and from the proceeds of selling the damaged property.
Contribution: The principle of contribution states that if the customer has taken more than one insurance policy for the same property, then the insurance companies would settle the claim equally or as per the sum insured selected. The customer cannot claim “full” from more than one insurance company for the same damaged property even though he/she has taken an insurance policy for the same property from more than one company.
Proximate Cause: It is an active and efficient cause in the chain of events that lead to the damage of the property. The nearby cause in a series of events would be taken into consideration before settling the claim.
Loss Minimization: The principle of loss minimization states that the customer should act appropriately to reduce the loss in case of an insured peril. Merely having insurance doesn’t entitle the customer to a claim in case of loss if it’s found that the customer didn’t act in a proper manner to reduce the loss.
What is PolicyBachat and How does it help with my Life Insurance Policy Purchase?
PolicyBachat is an online insurance web aggregator which helps in selecting the best insurance policy for its customers based on the customer’s requirements. We at PolicyBachat provide the customer with a wide range of options to select from. The best life insurance policy can be selected online from our portal. We even provide assistance to our customers in selecting the best life insurance policy based on the requirements of the customer.
What Are The Types Of General Insurance?
A policy or agreement between the policyholder and the insurer is considered only after the realization of the premium. The premium is paid by the insurer who has a financial interest in the asset covered. The insurer will protect the insured from financial liability in case of loss.
- Car Insurance
- Health Insurance
- Travel Insurance
- Home Insurance
- Commercial Insurance
- Marine Insurance
What Do You Have to Pay for Insurance?
Insurance is an agreement between the insured customer and the insurance company in which the insurance company assures to pay a sum amount in return for a periodical amount known as “Premium”. An insurance premium is an amount paid monthly or annual payment you make to an insurance company to keep your policy active.
What is a National Pension Scheme?
National Pension Scheme also known as National Pension System which is specially designed to offer financial security to Indian senior citizens. NPS scheme provides long-term savings options. It is open to all the employees from the public sector, private sector, and even the unorganized sector except for those who work in the Armed Forces.
What is the Cost of Professional Indemnity Insurance?
Professional indemnity insurance is a form of commercial insurance that protects professionals from financial loss or costs that arise from their work. The most common scenario for this type of insurance is when a company hires an outside contractor.