INSURABLE INTEREST

In order for the insurance contract to be valid, the insured must have an insurable interest in the subject matter of insurance. Insurable interest is a pecuniary interest that enables the policyholder to benefit from the existence of the object and suffer damage due to the death or damage of the object. The main points of valid insurable rights are as follows:

There must be an insurance item.

 

The policy holder should have a monetary relationship with the subject matter.

 

The relationship between the policy holder and the subject matter should be recognized by law. In other words, there should be no illegal relationship between the policy holder and the insured subject.

 

The financial relationship between the policyholder and the subject matter should enable the policyholder to benefit financially from the survival or existence of the subject matter, and/or suffer economic losses in the event of death or existence of the subject matter.

 

UTMOST GOOD FAITH

The doctrine of disclosing all important facts is embodied in the important principle "Supreme Integrity" applicable to all forms of insurance. When signing an insurance contract, both parties to the insurance contract must have the same mindset (habit). Regarding material facts, there must not be any false statements, non-disco guarantees or fraud. If it is an insurance contract, the legal motto "Caveat Emptor" (please be careful with the buyer) shall not prevail. In this case, the buyer is obliged to convince himself of the authenticity of the subject matter, and the seller is not obliged to provide information about it. But in an insurance contract, the seller (ie the insurer) must also disclose all important facts. An insurance contract is a contract with absolute sincerity, that is, both parties to the contract must disclose all important facts truthfully and completely.

Material Facts

Significant facts are facts that affect the judgment or decision of the parties to conclude a contract. The crucial fact is that the knowledge will affect the parties in deciding whether to provide or accept this risk, whether the risk is acceptable, and on what terms and conditions should the party accept the risk. These facts are directly related to the degree of risk related to the subject of insurance. For life insurance, the material, facts or factors that affect the risk will be age, residence, occupation, health, income, etc.; for property insurance, it will be the use, design, owner and status of the property.