Principles of Insurance ,7 basic principles of Insurance

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Insurance is know became a very popular.Here with in our article we are going to share with you the information about the basic principles of Insurance.

The main objective of every insurance contract is to give financial security and protection to the insured from any future uncertainties. Insured must never ever try to misuse this safe financial cover.

Seven principles of Insurance,

The seven principles of insurance are ,

1:Principle of Uberrimae fidei (Utmost Good Faith)

the Principle of Utmost Good Faith, is a very basic and first primary principle of insurance.

2.Principle of Insurable Interest

The principle of insurable interest states that the person getting insured must have insurable interest in the object of insurance.

3.Principle of Indemnity

Indemnity means security, protection and compensation given against damage, loss or injury.

4.Principle of Contribution

Principle of Contribution is a corollary of the principle of indemnity. It applies to all contracts of indemnity, if the insured has taken out more than one policy on the same subject matter.

5.Principle of Subrogation

Principle of Subrogation is an extension and another corollary of the principle of indemnity. It also applies to all contracts of indemnity.

6.Principle of Loss Minimization

According to the Principle of Loss Minimization, insured must always try his level best to minimize the loss of his insured property, in case of uncertain events like a fire outbreak or blast, etc.

7.Principle of Causa Proxima .

The principle states that to find out whether the insurer is liable for the loss or not, the proximate closest and not the remote farest must be looked into.

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