Tuesday, 14 July 2015
Definition Definition.
Insurance is derived from the word that means the
insurance coverage. Insurance is an agreement between the insured or the
customer with the insurer or insurers. The insurer is willing to bear some
losses that may arise in the future after the insured agreed on the payment of
money called a premium. The premium is the money spent by the insured as
compensation to the insurer.
Under the Code of Commercial Law (Commercial code),
Insurance or Assured is defined as an agreement by which a binding to an
insured, to receive a premium, to provide reimbursement to him for the loss,
damage or loss of expected profit, which may be experienced as an event that is
not certain.
Formally, in the legislation, insurance is defined
as an agreement between two or more parties, which the parties committed
themselves to the insured person, by accepting insurance premiums, to provide
reimbursement to the insured for the loss, damage or loss of expected profit or
responsibility law third parties that may be suffered by the insured, arising
from an uncertain events, or giving a payment based on death or life of an
insured person.
The terms of the insurance agreement and the rights
and obligations of the parties contained in an insurance policy. Examples of
these are insurance life insurance, accident, loss, health and fire insurance.
Party risk that channel referred to as the
"insured", it is customers or people who delegate or transfer the
risk to be received, while the party receiving the risks referred to as the
"insurer" is the insurance companies that underwrite or replace the
loss of the customer.
Agreement between the two sides is called a policy.
This policy is a legal contract that explains all terms and conditions are
protected. fees paid by the "insured" to the "guarantor"
for the risk borne referred to as "premium". It's great value premium
is generally determined by the "insurer" which consists of funds that
can be claimed in the future, administrative costs, and profits.
Function Purpose Insurance
The main function of insurance is a mechanism of
transfer / transfer of risk or a risk transfer mechanism, which transfer risk
from one party to the other party, namely the insured that the insurer. The
transfer of risk is by no means eliminates the possibility of misfortune, but
the insurer to provide financial security facilities or financial security and
tranquility or peace of mind for the insured. In return, the insured is obliged
to pay premiums in a relatively small amount when compared with the potential
losses that might be natural.
Basic Principles of Insurance:
The basic principles that must be met by
institutions or companies engaged in the insurance business are:
- Insurable interest is the right to insure arising from a financial relationship between the insured and the insured with a legally recognized.
- Utmost good faith is An action to disclose accurately and completely, all the material facts or material fact about something to be insured whether requested or not. What it means is: the insurer must honestly explain clearly everything about the extent of the terms / conditions of insurance and the insured must also provide a clear and correct for objects or interests of the insured.
- Proximate cause is a cause of an active, efficient cause that chain of events that lead to a result without the intervention of the start and actively from new and independent source.
- Indemnity is a mechanism by which the insurer providing financial compensation to put the insured in a financial position that he had prior to the loss.
- Subrogation is the transfer of rights to demand from the insured to the insurer after a claim has been paid.
- Contribution is the Right of the insurer to invite other equally bear, but not necessarily the same obligations to the insured to help provide indemnity.
