The Basic Principles of Insurance

Basically, everything that his name must have guidelines / basic principles, as well as the insurance industry. Still related to the previous article, the purpose of insurance, hopefully the following article which will further add to our knowledge about the world of insurance.

Basic Principles of Insurance

There are some basic principles that animate the insurance industry and guide the implementation of the activities of insurance :

1. Insurable Interest
Insure that the parties should have an interest in the property that can be insured (insurable). Where the object of interest and must be legal (not against the law) and decent. Having the benefit of the insured object if you suffer financial loss, if the accident occurred and caused loss or damage to the object.

In the event of a disaster for the insured object and proved that you do not have a financial interest in the object, then you are not entitled to receive compensation. Violations of this principle may result in a claim can not be paid.

2. Utmost Good Faith (Best Intentions)
Insured shall inform clearly and carefully about all the important facts relating to the object to be insured (material facts that would affect the Insurer in accepting or rejecting an application for insurance). While the Insurer is obliged to explain the risks are warranted or excluded, all terms and conditions of coverage are clearly and accurately. This obligation applies since the agreement concerning the insurance agreement is discussed through insurance contracts completed or in the event of changes to the insurance contract and the things that are related to those changes.

3. Indemnity (Indemnity Compensation)
Intent on this principle aims to restore the position of the insured in the position just before the loss of the guaranteed policy. If the insured object affected causing loss, the Insurer will indemnify be the same as immediately before the loss, to restore the financial position of the insured. Thus the insured is not entitled to obtain greater compensation (taking advantage) of Insurers for their losses.

Some way of payment of compensation applicable:
• Payment by cash, or
• Repair or replacement, or restoration of.

4. Subrogation
This principle is a consequence of the principle of Indemnity, namely the transfer of title (subrogation) of the Insured to the Insurer, if the Insurer has paid compensation to the insured.

5. Contribution
If an insured object to some insurance companies will apply the principle of contribution of each of the insurance company.
example:
Insured insuring the object of $ 200 million to three Insurers (insurance company):
Example: Insurance A $ 200 million, $ 100 million B, and C $ 100 million.
If the object is a total loss, then the maximum compensation that the insured obtain from each Person is:
A = $ 200 million / $ 400 million x $ 200 million = $ 100 million
B = $ 100 million / $ 400 million x $ 200 million = $ 50 million
C = $ 100 million / $ 400 million x $ 200 million = $ 50 million
Means the amount of compensation received from a third Person Insured (insurance company) is not $ 400 million, but $ 200 million (according to the actual price).

6. Proximate Cause (Proximal Causes)
The principle is used to find the cause of the loss is actively and efficiently. "Unbroken Chain of Events" is a series of events chain unbroken.
The purpose of this principle is that if the interest / object of the insured who is insured, the unfortunate, the first thing to be done by the Insurer is looking for causes of an active and efficient that drives a series of such events without interruption, so that in the end there is a disaster . 
 
Hopefully after understanding about the basic principles and purposes of insurance, will make a strong belief in ourselves that insurance is an important thing in our lives. May be useful.

Purpose of Insurance

In modern times, as now, there are still some people who think of insurance as a negative thing. Maybe some people are not yet fully understand what is meant by insurance are, or may be they ever have an insurance policy, but when filing a claim denied by insurers. 

Well for those of you who still do not understand what it is insurance, or for those of you who want to buy an insurance policy, it's good to let the world know about insurance.

Purpose of Insurance :
 
-  Provide a guarantee of protection from the risk of losses suffered by one party.
 
-  Improve the efficiency, because it does not need to specifically maintain security and surveillance to provide protection that takes a lot of energy, time and cost.
 
-  Equitable charge, which is enough only to pay a certain amount and do not need to replace / pay for their own losses incurred and the amount is not necessarily uncertain.


-  The basis for the bank to extend credit because banks require collateral protection of the collateral provided by the borrower money.
 
-  As savings, because the amount paid to the insurer will be returned in larger quantities (for life insurance).

-  Cover the Loss of Earning Power shut a person or business entity when he can not function. 

Hopefully after knowing and understanding the article above, you can add insight about insurance and can also change your mindset for the better of the insurance industry. May be useful.

Unique In The World of Insurance Claims

Maybe for some people, insurance synonymous with life insurance, health, accident etc.Well, still on the unique, this time I will try to convey the uniqueness in the world of insurance.

Here are some unique claims that occur in the world of insurance :

1. Moldy
Whoever the person would want to have a dream house that is clean and well maintained. But what happens if your house there is a lot of mold or mildew on the wall of the house, and then cause disease in your family  But this time you do not have to worry anymore of it, there is an insurance policy that protects you and your family ready, of course, related to mold or mildew in your home. You can file a claim, if it causes harm to you.

2. Terrorism
At present, the world is enlivened by the issue of a terrorist attack. For those of you who may feel worried about the terrorist attacks happen to you or your property, do not worry, you simply buy this kind of insurance policy. Although there are insurers who settle claims on a case-by-case basis, but you can also file a claim related to terrorism.

3. Accidents Due To Own Property
Anyone would not be able to guess what will happen to befall a person. Insurance claims accidents caused by another person, it is common. But what if the disaster is due to your own negligence  Nowadays you do not have to worry anymore, there is an insurance policy that covers you are ready at any time if there are calamities that befall you just because you slipped on the stairs of your home

4. Bite
According to Bill Wilson of the Independent Insurance Agents & Brokers of America, estimated claims incurred due to dog bites perched in the amount of 1.33 from all liability claims. Most insurance companies will handle the medical bills because someone is bitten by a dog, cat, snake.

5. Fall of a Foreign Object
As the incidence plane is shot down some time ago, what if an airplane debris to fall on your house  Or suddenly there is one meteor that fell from the sky and destroy your home  Surely we would feel sad. Well, for those of you who worried the incident would happen to you, buy one of these types of insurance policies, because the claim that would be prepared to bear you ask if one of the events that happen to your property. But before you make a claim, you better not renovate your total property damage, before the insurance company to assess the extent of the damage that happened to your property.