Explain Fundamental Principles of Fir Insurance 2011 : Just like other contracts, a fire insurance is a contact and is governed by the Indian Contract Act. Therefore, a fire insurance contact, in order to be valid must assess the sum essentials of a valid contract. In addition to these essentials, it must also possess the following fundamental principles of insurance.
1. Utmost good Faith : THE observance of utmost good faith by both the parties is of vital importance in lire insurance contract. In fire insurance, the insured and insurer feel that the fire should not occur and if it occurs both will be equally' unhappy. In all fire insurance
Fire insurance contacts there is an implied condition that there shall be the utmost good faith between the parties. Therefore, the insured and insurer must disclose all the material facts to each other which are known to them.
The insured must supply all the . Information regarding the subject- matter of insurance which can throw sufficient light in understanding the nature and extent of risk involved in its insurance. For this purpose the insured is required to 1111 proposal form to give the detailed information regarding the subject-matter of insurance. The insured must observe the utmost good faith at the time of taking policy and at the time of claiming the loss. When the policy is renewed for the further period, the insured must give necessary information regarding any changes in the insured property. If the insured conceals any material Information The insurer can avoid the contract in case of any loss. Thus, if insured has not observed good faith or is guilty of concealment or non disclosure of any material fact, the contact can be avoided. The duty of good faith is equally applicable to the insurer and he must disclose the information which is you'll to him regarding the contact of insurance.
Utmost good faith the insured has to sign a declaration regarding the correctness of information given in the proposal form. Thus, the principle of utmost good faith places duty on each party to disclose all the material facts to the other. Thus, insured must disclose all material facts to the insurer at the time of proposal for insurance.
2. Insurable Interest: In every lire insurance contract, insured must have insurable interest in the property insured. An insurable interest is an interest of such nature that the possessor would be financially injured by the occurrence of fire and would be benefited by its existence. The insured must be interested in the preservation of the subject-matter of insurance. Insurable interest is the prerequisite of fire insurance contract and without the presence of insurable interest, a fire insurance contract is void and no better the a wagering contract.
In lire insurance, the insured must have insurable interest in the subject- matter both at the time of the contract and at the time of the loss.
Following are some of the examples of insurable interest: (a) file opener or joint openers can insure their property.
(b) Agent can take Insurance policy on behalf of his principal.
(c) Administrators can insure property for which he is responsible.
(d) Bailiess have insurable interest in the goes held by them in trust.
(e) Husband and wife can insure each other's property to the extent of its full value.
1. Utmost good Faith : THE observance of utmost good faith by both the parties is of vital importance in lire insurance contract. In fire insurance, the insured and insurer feel that the fire should not occur and if it occurs both will be equally' unhappy. In all fire insurance
Fire insurance contacts there is an implied condition that there shall be the utmost good faith between the parties. Therefore, the insured and insurer must disclose all the material facts to each other which are known to them.
The insured must supply all the . Information regarding the subject- matter of insurance which can throw sufficient light in understanding the nature and extent of risk involved in its insurance. For this purpose the insured is required to 1111 proposal form to give the detailed information regarding the subject-matter of insurance. The insured must observe the utmost good faith at the time of taking policy and at the time of claiming the loss. When the policy is renewed for the further period, the insured must give necessary information regarding any changes in the insured property. If the insured conceals any material Information The insurer can avoid the contract in case of any loss. Thus, if insured has not observed good faith or is guilty of concealment or non disclosure of any material fact, the contact can be avoided. The duty of good faith is equally applicable to the insurer and he must disclose the information which is you'll to him regarding the contact of insurance.
Utmost good faith the insured has to sign a declaration regarding the correctness of information given in the proposal form. Thus, the principle of utmost good faith places duty on each party to disclose all the material facts to the other. Thus, insured must disclose all material facts to the insurer at the time of proposal for insurance.
2. Insurable Interest: In every lire insurance contract, insured must have insurable interest in the property insured. An insurable interest is an interest of such nature that the possessor would be financially injured by the occurrence of fire and would be benefited by its existence. The insured must be interested in the preservation of the subject-matter of insurance. Insurable interest is the prerequisite of fire insurance contract and without the presence of insurable interest, a fire insurance contract is void and no better the a wagering contract.
In lire insurance, the insured must have insurable interest in the subject- matter both at the time of the contract and at the time of the loss.
Following are some of the examples of insurable interest: (a) file opener or joint openers can insure their property.
(b) Agent can take Insurance policy on behalf of his principal.
(c) Administrators can insure property for which he is responsible.
(d) Bailiess have insurable interest in the goes held by them in trust.
(e) Husband and wife can insure each other's property to the extent of its full value.
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