INSURANCE CONTRACT

Can you guys help? I want to insure my ex-girlfriends life because she still owes me money! Ive changed my job working from project coordinator to an engineer in coal mine do I need to disclose it to my insurer.My car destroyed in fire and whole scrap has been taken away by strangers. Will I get theft or fire claim.Can I take claim from Insurance company or the person responsible for loss or from bothCan I insure my car from three different companies and seek the claim benefit? And what about life insurance.

Written contract that transfers risks/financial responsibility for losses up to specified limits to an insurer for a money payment called Premium.A tool of Risk TransferCan all risks or peril is insurable?Economic & Social Perspective

OfferAcceptanceConsiderationCapacity To ContractFree ConsentLegal Object

Uberrima fides or Utmost Good FaithInsurable InterestIndemnitySubrogation and ContributionProximate Cause

Both parties to the contract are bound to exercise good faith and do so by a full disclosure of all information material to the proposed contract. Information about Material FactsThe insurers, who issue the contract document, have the same duty to observe good faith while issuing the policy and should ensure that there is no ambiguity in the contract wording.

Facts which are common knowledgeFacts of lawFacts which a survey can reveal Facts about with insurance company has waived further information (Principle of waiver)

Insurance contracts without insurable interests have no sanction of the law as they amount to speculation. By this principle, insurance interest exists to other parties also like Debtor-Creditor, employer-employee, Business partners etc.Their interest is limited to the extent of their financial commitment only.

In the case of life insurance policies, insurable interest must exist at the inception of the policy. There is no requirement for insurable interest at the time of a claim under the policy. In the case of Gen. Insurance policies, insurable interest must exist at the time of the clam.

Indemnity means that the insured person is placed, financially, in the same position, as he was before the loss. One can not make profit out of Claim.This principle does not follow the Life Insurance Contracts.

Contribution- Contribution condition is a corollary to the Principle of indemnity. If an insured obtains more than one policy covering the same risk, he cannot recover the same loss from more than one source so that he is not benefited by more than Indemnity. Contribution condition checks that each policy pays only a ratable portion under each separate policy.

When Contribution arise-Two or more policies of indemnity must existThe policy must cover common interestCommon perilCommon subject matterEach policy must be liable for loss

Subrogation condition is another corollary to the principle of Indemnity. A loss may occur accidentally or by the action or negligence of third party . The property owners have a right to proceed against the offending third party to recover the loss/damage and also under their insurance policy but not under both.An exception to this are life insurance polices wherein insured/ beneficiaries can claim under an insurance policy and also proceed against the offending third party.

When Subrogation arise-TortContractStatuteSubject matter of Insurance

According to the principle of proximate cause an insurance policy is designed to provide compensation only for such losses as are caused by the perils, which are stated in the policy. The liability of the insurer arises only if the loss is caused by a peril, which is specifically covered under the policy. However, the loss is not payable if it is caused by a peril, which is excluded under the policy or is not mentioned.

In life insurance, the doctrine of Causa Proxima is not applied because the insurer is bound to pay the amount of insurance whatever may be the reason of death it may be natural or unnatural. So this principle is not of much practical importance in connection with life insurance. However, this principle is observed in life insurance too in the following circumstances:

When the loss is the result of two or more cause, operating simultaneously or one after the other in succession, it becomes necessary to ascertain what is known as the proximate cause, which brought about the loss.

An army officer while visiting sentries posted along the railway line was killed by a passing train. The policy excluded death or injury directly or indirectly caused by war etc. The passing of the train was the proximate cause of the accident, but the indirect cause was war, for that was the reason why the officer was present on the railway line. In view of the words used in the policy, the insurers were not liable.(Coxe v Employer Liability Assurance Corporation,1916)

Contingency..upon happening of an eventAleatory.. unequal money exchangeVoluntary..parties act in good faithAdhesive. Insurer provided wordingExecutory..executed after payment of anticipated lossPersonal.between 2 parties only

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