The Contracting Parties must be legally entitled to accept them. Most adults have the legal capacity to accept contracts unless they are drunk, mentally ill or mentally retarded. The main requirement is that the parties know what they agree on - a meeting of chiefs; Otherwise, there could be no agreement. For the protection of minors, the law does not confer on them the legal capacity to conclude contracts, unless this is provided for by law. For example, if you are injured in a traffic accident caused by the reckless driving of another party, you will be compensated by your insurer. However, your insurance company may also sue the reckless driver to get that money back. As already mentioned, insurance works according to the principle of mutual trust. It is your responsibility to disclose all relevant facts to your insurer. Usually, there is a breach of the principle of good faith if you, intentionally or accidentally, do not disclose these important facts. There are two types of secrecy: The most common types of insurance contracts include: In the United States, property and casualty insurers typically use similar or even identical language in their standard insurance policies, which are developed by consulting organizations such as the Insurance Services Office and the American Association of Insurance Services. [31] This reduces the regulatory burden on insurers, as policy forms must be approved by states; it also makes it easier for consumers to compare their policies, but at the expense of consumer choice.

[31] In addition, with the review of policy forms by the courts, interpretations become more predictable because the courts explain the interpretation of the same clauses in the same policy forms and not different policies from different insurers. [32] Insurance contracts are tailored to specific needs and therefore have many characteristics that are not found in many other types of contracts. Since insurance policies are standard forms, they have standard language that is similar in a variety of different types of insurance policies. [1] All insurance contracts are based on the concept of uberrima fides or the doctrine of good faith. This doctrine emphasizes the existence of mutual faith between the insured and the insurer. Simply put, when you apply for insurance, it becomes your duty to honestly disclose your relevant facts and information to the insurer. Similarly, the insurer cannot hide information about the insurance coverage sold. An insurer may change the language or coverage of a policy at the time of contract renewal. Endorsements and endorsements are written terms that supplement, delete or modify the terms of the original insurance contract. In most states, the insurer is required to send you a copy of the changes to your policy.

It is important that you read the endorsements or endorsements to understand how your policy has changed and whether the policy is still sufficient to meet your needs. The events covered by insurance contracts are uncertain. This means they may not happen at all – for example, a car accident. The insured agrees to pay a premium in exchange for car insurance. In the event of an accident, the insurance company will cover the cost of the damage. But even if there is never an accident, the insured must pay the premiums. An insurance company has legal capacity if it is authorized to sell insurance in that particular state and acts within the framework of its statutes. B) Guarantees: The guarantees of insurance contracts are different from those of ordinary commercial contracts.

They are imposed by the insurer to ensure that the risk remains the same throughout the policy and does not increase. For example, if you borrow your car for auto insurance from a friend who does not have a license and that friend is involved in an accident, your insurer may consider this a breach of coverage because they have not been informed of this change. As a result, your application may be rejected. Not all insurance contracts are indemnification contracts. Life insurance policies and most personal accident insurance policies are no-compensable contracts. You can purchase a $1 million life insurance policy, but that doesn`t mean your life value is equal to that amount. Since you cannot calculate the net worth of your life and set a price on it, no clearing contract applies. When applying for insurance, you will find a wide range of insurance products available on the market.

If you have an insurance advisor, he or she can look around and make sure you get adequate insurance coverage for your money. Nevertheless, a little understanding of insurance contracts can go a long way in keeping your advisor`s recommendations on track. Let`s say you don`t know that your grandfather died of cancer and therefore didn`t disclose this essential fact in the family history questionnaire when applying for life insurance. it is an innocent secret. However, if you were aware of this essential fact and deliberately hid it from the insurer, you are guilty of fraudulent secrecy. It is also the principle of insurable interest that allows married couples to take out insurance for each other`s life, according to the principle that one can suffer financially if the spouse dies. There is also an insurable interest in certain business agreements, for example between a creditor and a debtor, between business partners or between employers and employees. The parts of an insurance policy vary depending on the type of insurance; However, the three main components of an insurance policy are conditions, limitations and exclusions.

Beneficiaries can be changed because the change of beneficiaries does not change the insured risk, so there are no consequences for the insurer if the policyholder changes beneficiary, but the insurer must be informed before the change has legal effect. This is to protect the insurance company from paying the wrong person or being forced to pay twice. Principle of renunciation and confiscation. A waiver is a voluntary waiver of a known right. Confiscation prevents a person from asserting those rights because he or she has acted in such a way as to deny the interest in safeguarding those rights. Suppose you do not disclose certain information in the insurance application form. Your insurer does not ask for this information and issues the insurance policy. This is a waiver. In the future, if damage occurs, your insurer will not be able to question the contract on the basis of secrecy. This is the estoppel. For this reason, your insurer must pay for the damages. In insurance, the insurance policy is a contract (usually a standard contract) between the insurer and the policyholder that determines the claims that the insurer is legally required to pay.

In exchange for an upfront payment, called a premium, the insurer promises to pay for losses caused by hazards covered by the insurance wording. There are many other important parts that are included in insurance contracts. Other essential elements of an insurance contract are: Most non-insurance contracts are commutative contracts – the amount of consideration provided by both parties is usually about the same. Thus, a contract for the purchase of a property usually requires payment of the amount of its value. However, insurance contracts are aleatorium contracts because the insurance company only has to pay when certain events occur. If they don`t happen, the company never has to pay, even if the insured has been paying premiums for decades. However, if a covered loss occurs, the insurance company may have to pay much more than it earned in premiums. Thus, contingency contracts are characterized by unequal consideration. Insurance contracts have traditionally been concluded on the basis of each type of individual risk (where risks have been defined extremely narrowly), and a separate premium has been calculated and calculated for each of them. Only the individual risks expressly described or "foreseen" in the policy were covered; As a result, these policies are now described as "individual" or "schedule-related" policies.

[13] This system of "named hazards"[14] or "specific hazards"[15] proved unsustainable in the context of the Second Industrial Revolution, as a typical large conglomerate could have dozens of types of risks to insure against. For example, in 1926, an insurance industry spokesman noted that a bakery would have to take out a separate policy for each of the following risks: manufacturing operations, elevators, teamsters, product liability, contractual liability (for a spur that connects the bakery to a nearby railway), building liability (for a retail store), and owners` protective liability (for contractor negligence). responsible for construction changes). [13] An insurance contract is a document that constitutes the agreement between an insurance company and the insured. At the heart of any insurance contract is the insurance contract, which defines the risks covered, the limits of the policy and the duration of the policy. In addition, all insurance contracts stipulate: insurance contracts are aleatorium contracts, since the amount exchanged by the parties is unequal and depends on uncertain future events. Insurance contracts are also considered unilateral contracts because only the insurance company makes a legally enforceable promise. Other important terms that you can see in your insurance policy can be found in this glossary. .