Tuesday, January 1, 2008

BASIS PRINCIPLE OF INSURANCE

Let us recapitulate the basic Principles of Insurance. The basic principles are:


1. A person who insures a motor vehicle must have an insurable interest in it.

2. The sums contributed to an insurance pool are called premiums.

3. Payment for losses suffered is called compensation.

4. Insurance contracts must be made with both parties showing the utmost good faith.

5. To restore a person to his original position before he suffered a loss is to idemnify
him.

6. The sum payable on a life policy is called the benefit.

7. An insurance company which pays out a claim then subrogates the rights of the
insured party.

8. If two policies cover the same loss each company will contribute towards it
.

9. Public policy is aimed at reducing or preventing crimes.

10. By means of which policies of insurance the loss lighteth rather easily upon many than heavily upon few.

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