Understand Your Insurance Contract

All insurance contracts are governed by the concept of offer and acceptance. This requires you to fill the proposal form and send it to the insurance company. Sometimes you are also required to attach a check for the premium amount, with the proposal form.

Your filling the proposal form and sending it to the insurance company is the offer and when the insurance company accepts your proposal it is the acceptance part of the concept. The amount you pay as premium is considered as the consideration part of the contract. The concept of legal capacity also applies to insurance contracts. It requires both the parties to be legally capable of entering a contract. Your insurance contract is based on legal purpose, which means that the contact is not meant for encouraging illegal activities. The other legal principles that govern the contracts are:

Principle of Indemnity:

This principle requires the insurer to pay an amount, not more than the actual loss suffered, in case of loss. The amount paid as claim by the insurance company should not be more than the sum assured in the insurance contract. The aim is to provide a claim amount that will help the claimant to regain the lost financial position. In some indemnity contracts, the amount payable by the insurance company is subject to the amount of actual loss. Some indemnity contracts also have a provision for the claim to be paid only if the actual loss exceeds a certain amount. For example, in an auto insurance contract of 3000 dollars, you would be eligible for the claim amount only if your actual loss exceeds 3000 dollars. In case, the actual loss amount is below 3000 dollars, you would be liable to bear all the costs.

Insurable Interest

In this insurance cover, the insurance contract covers only those properties or events specified at the time of investment. For example, if you live in your uncles house and apply for a homeowners insurance, the insurance company will reject the claim, since you are not the owner of the property and do not suffer any personal financial loss in case the house gets damaged.

Principle of Subrogation

The principle of subrogation enables the insured to claim the amount from the third party responsible for the loss. It allows the insurer to pursue legal methods to recover the amount of loss, which the company has paid the insured via the insurance claim. For example, if you get injured in a road accident, due to reckless driving of a third party, the insurance company will compensate your loss and will also sue the third party to recover the money paid as claim.

Doctrine of utmost good faith

This means that both the parties are expected to disclose any information, important to the contract. For example, when applying for life insurance, it is your duty to disclose any permanent ailments that you might have. Likewise, your insurer also is expected to be clear on the illnesses that are not covered under the contract.

Once you become familiar with the principles, you will be able to understand the scope of your insurance contract. This makes you independent of the insurance advisor.

Joe Kenny writes for the UK Personal Loan Store and offer more information on UK debt consolidation loans and other loan topics available on site.Earn How To Make Fast Money
make money survey
Easy Fast Loan Make Money Way
Best Ways To Make Money From Home
Internet Make Money Referral
Make Alot Of Money Fast
Home Make Money Survey
Make More Money Fast
email marketing campaign
Make Extra Money On Ebay
2 Easy Make Money Runescape Ways
Make Money Own Site Web
How To Make Money With Penny Stock
Home Internet Make Money Online Real Work
Easy Ways To Make Money For Child
How You Can Make Money
Make Money On The Internet Online
Earn Easy Make Money Ways
Make Money Online Auction
Make Man Money More Than Why Woman
Craft To Make Money At Home
Credit Easy Make Money Quick Ways
Cam Make Money Web
Easy Fun Make Money Ways
How Kid Can Make Money
Business Home Make Money Online Opportunity
Extra Make Money Ways
make money in stock market
Real Ways To Make Money On The Internet
Affiliate Make Money Program Through
Make Money Stock
Based Business Home Make Money That
Easy Ways To Make Money In Illinois
On Fixed Income Need To Make Extra Money
Child Easy Make Money Ways
Business Home Make Money Online Real Stay Ways
Make Money By Taking Online Survey
Make Money From Home Uk
Jobs That Make A Lot Of Money
Work From Home Canada Make Money At Home
Auction Internet Make Money
In Make Market Money Stock
Based Business Home Home Make Money Online
Make Money From Home Online For Free
make money on the internet
Free Good Home Make Money
Doing From Home Make Money Simple
Make Big Money Fast
Make Money Trading Stock
make money new ways
Make Money While Online
Internet Mailto Make Money
Easy Fast Make Money Ways Wbr
make money home based business
Building Can Downline I Make Money
Ebay Make Money Really
Learn To Make Money On Ebay
Cash Getting Make Money Quick
From Home Make Money Online Resale Right
Can Extra Make Money Woman
20 Easy Make Money Online Ways
Better Make Money Online Opportunity
Ways To Make A Little Extra Money
Business Forumshere
Fast Make Money Tip
make money new ways
make money ways
Fast In Make Money
Adsense Adsense Adsense Adwords Make Money Secret
Again Make Money Stock That
Ways To Make Money In Real Estate
Cash Getting Make Money Quick
Internet Make Money Online
Free Email Marketing
Easy From Home Make Money Ways
Business Internet Make Marketing Money Online Opportunity
make money in real estate
Stay At Home Moms Make Money
Make Money From Home Now
make money survey
Business Computer From Home Make Money Work
Internet Mailto Make Money
Business Fast Make Money
Php Email Marketing
Idea For Kid To Make Money
Internet Make Money Via
Home Home Make Money Online Work
Make Fast Money Message Boards
Web Site That Make Money
Make Money Online Right Now
Being Just Make Money Online
Teen Make Money Online
Make Market Money Stock
Legal Make Money Online Ways
Free And Quick Ways To Make Money
Make Money With The Stock Market
Make More Money Now
From Home Make Money Opportunity
Email Marketing Articles
Join Free Make Money Online