Six principles of insurance is something that should be known to every insurance agent and insurance clients.
Here is the basic principle of insurance:
1. the Insurable Interest
Insurable interest means that in order to be insured can purchase an insurance policy, he should have ownership or financial interest in anything like to insured.
This principle is intended to keep the people who bought the insurance policy claim for not doing something that is not their own or does not directly affect them.
For example, you can't buy an insurance policy upon the Borobudur Temple unless you have ownership or loss physically or financially due to the structure of the temple.
2. Indemnity
Indemnity or compensation is defined as someone over compensate for the losses suffered.
Punitive damages in the insurance means that an insurance policy protects you from losses that occurred over something that is insured.
The best example is car insurance. If one car accident, he will get compensation for loss due to such accidents.
3. Uberrimae Fidei
Uberrimae fidei or utmost good faith (in good faith) means that insurance companies are dependent on the insured to disclose relevant information about him or overanything that is insured.
If you want to get health insurance, good faith means that you have to disclose the actual health conditions including pre-existing conditions.
4. Subrogation
Subrogation rights of insurance companies is to take action against parties who may have caused a claim against your insurance.
For example, if someone is involved in a car accident not caused by such person, the insurer has the right to obtain compensation from the person who caused the accident or his insurance company.
This allows insurance companies to pay for the loss due to claims which are not the responsibility of the insured.
5. Contingency Insurance
Contingency insurance policy is basically the top of worst case scenario.
For example, you will export the goods to buyers in other countries. When the goods are damaged or lost when it received the buyer, and the buyer refuses to accept delivery, You can make a claim through Your contingency policy.
6. the Proximate Cause
Proximate cause is basically insurance that replace losses on other types of insurance are not replaced.
For example, assume that a truck carrying three tons of preparation for the MoslemIdul fitri holiday had an accident.
The accident was not severe, and the goods are not damaged, but they arrived a week after the Idul fitri holiday to the detriment of retailers.
Because the goods are not damaged when it gets to the retailer, then the claim can not be submitted upon the kind of standard policy.
An insurance policy which covers the proximate cause allows retailers to get reimbursement for losses which occur. []
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