Integrity first
stated that all material facts should be disclosed in a true and complete form.
This means that facts should be disclosed in the form of facts. Regarding
material facts, there should be no concealment, misrepresentation, error or
fraud. There should be no false statements, no half of the truth, and no
silence on substantive facts.
Responsibilities of both
parties
The
responsibility for disclosing material facts lies with the parties, the insured
and the insurer, but in fact, the insured must pay special attention to abide
by this principle, because he usually fully understands the facts related to
the insurance policy. Despite all effective checks on the insurer, the subject
was still not disclosed.
Facts need not
be disclosed by the insured
The following
facts, however, are not required to be disclosed by the insured:
Facts which tend
to lessen the risk.
Facts of public
knowledge.
Facts which
could be inferred from the information disclosed.
Facts waived by
the insurer.
Facts governed
by the conditions of the policy.
THE PRINCIPLE OF
COMPENSATION.
Generally,
except for personal insurance, all insurance contracts are indemnity contracts.
According to this principle, the insurer promises to place the insured in the
same position as before the insured event occurred in the event of loss. In
some forms of insurance, the compensation principle is modified to apply. For
example, in marine or fire insurance, sometimes certain profit margins that
should have been obtained in the absence of an incident are also included in
the loss. For compensation in the true sense, the insured has no right to
profit from its losses.
USE FOUND INSURANCE:
The principle of
indemnity is a basic feature of insurance contracts. In this case, the
insurance industry lacks gambling, and the insured will often cause excess
insurance, and then intentionally cause losses, which may generate financial
benefits. achieve. Therefore, in order to avoid such deliberate losses, only
actual losses are payables, not deposits (higher excess insurance). If the
property insurance is insufficient, the insurance amount is less than the
actual value of the insured property. If the insurance is insufficient, the
insured is usually regarded as his own insurer, and if insured loss occurs, he
should bear the loss himself.
To avoid anti-social
behavior:
If the insured
is allowed to obtain income exceeding the actual loss, it is against the
principle of compensation. After insuring his own property risk, he will easily
gain income by destroying his property. He will be constantly tempted to
destroy property. Therefore, the entire society will only take anti-social
behavior; vice versa. That is, these people will be interested in reaping
benefits after their property is destroyed. Therefore, the principle of
compensation is applied, and only the cash value of his loss is compensated,
and nothing more, even though he may have already insured a larger amount.
To keep the premium low:
If the iI1
compensation principle is not adopted, a larger amount will be paid for a
smaller loss, which will increase the cost of insurance and must increase the
insurance premium. If the premium is increased, two things may happen: first,
people may be unwilling to insure; second, unscrupulous people will get
insurance to destroy property to profit from this behavior. Both of these
things will defeat the purpose of insurance. Therefore, the principle of
compensation is helpful to them here, because insurance of this amount is only
provided if the actual loss is compensated and does not exceed the actual
financial loss, thereby eliminating this temptation.
Subrogation
The theory of
subrogation means that the insurer has the right to replace the insured after
the claim is settled after the claimant’s right to recover from the alternative
source is involved. If the insured is capable of recovering all or part of the
loss from a third party due to negligence, the loss may have been deposited,
and its right of recovery will be withheld to the insurer when the claim is
resolved. Thereafter, the insurance company sought compensation from a third
party. The insurer can exercise subrogation before compensating for the loss.
Essentials of Subrogation
Corollary of the principle of indemnity: The
principle of subrogation is a supplement to the principle of indemnity. The
latter theory says that only the actual value of the property loss is
compensated. Therefore, the former follows the principle that if the damaged
property has any remaining value or any rights to a third party, the insurer
can compensate for the remaining property or rights of the property. .
Property, because if the insured is allowed to keep the property, his realized
gains will exceed the actual loss, which runs counter to the principle of
compensation
