The future is uncertain. An individual may therefore not know what can happen tomorrow. Very many losses can occur at any time that can strain an individual financially. Owing to this, some companies have been formed to provide insurance services to people. When you are insured, in case the peril you were covered against occurs, you will be compensated for the loss hence; the financial strain will be reduced greatly. In order to know about your cover, it is essential to familiarize yourself with some principles. There are important principles of insurance Oakland CA people have to know.
Before someone takes a cover, they are required by the company to disclose any relevant information that is pertinent to the contract. If a person is taking a cover for example against fire, the company may need to know if the building is prone to cases of fire. If such vital information is not disclosed, once the company discovers that some important information was omitted, the contract will become invalid. This principle is referred to as utmost good faith.
A person cannot take cover against a property that does not belong to them. This principle is known as insurable interest. When taking the cover, you must directly suffer loss if the peril you are seeking cover against occurs.
The aim of being insured is to restore an individual to their initial financial position before the occurrence of a peril. An individual is therefore not supposed to benefit from the occurrence of the peril. Once a peril that you had taken cover against occurs, it is meant to make life easier and thus less financially straining.
An individual has very many different kinds of covers they can take. A person can insure property against floods, accidents, fire and theft. If someones takes a cover for their car against theft, they can only be compensated if the car is stolen and not when the car is involved in an accident. This principle is known as proximal cause. Someone can only be compensated for the peril they took a cover against.
Immediately the peril that a person had insured against occurs, the company has the responsibility of compensating the insured property. If for example a car was involved in an accident, they can either repair the car or buy a new one depending on the extent of the damage. If the vehicle is badly damaged, they can buy a new car and reclaim the damaged car. The damaged car can therefore remain to the property of the insured.
Some people may take a cover for the same subject matter with various insurance companies thinking that if the car is damaged, they will receive compensation from all these companies. This is however not the case, a person will be compensated for the loss only by either both companies or by one company. This principle is referred to as principle of contribution.
Principles of insurance Oakland CA dwellers have to know are very important. Knowing these principles enables one to understand the contract comprehensively. It also prevents situations where someone does not know exactly what the contract entailed.
Before someone takes a cover, they are required by the company to disclose any relevant information that is pertinent to the contract. If a person is taking a cover for example against fire, the company may need to know if the building is prone to cases of fire. If such vital information is not disclosed, once the company discovers that some important information was omitted, the contract will become invalid. This principle is referred to as utmost good faith.
A person cannot take cover against a property that does not belong to them. This principle is known as insurable interest. When taking the cover, you must directly suffer loss if the peril you are seeking cover against occurs.
The aim of being insured is to restore an individual to their initial financial position before the occurrence of a peril. An individual is therefore not supposed to benefit from the occurrence of the peril. Once a peril that you had taken cover against occurs, it is meant to make life easier and thus less financially straining.
An individual has very many different kinds of covers they can take. A person can insure property against floods, accidents, fire and theft. If someones takes a cover for their car against theft, they can only be compensated if the car is stolen and not when the car is involved in an accident. This principle is known as proximal cause. Someone can only be compensated for the peril they took a cover against.
Immediately the peril that a person had insured against occurs, the company has the responsibility of compensating the insured property. If for example a car was involved in an accident, they can either repair the car or buy a new one depending on the extent of the damage. If the vehicle is badly damaged, they can buy a new car and reclaim the damaged car. The damaged car can therefore remain to the property of the insured.
Some people may take a cover for the same subject matter with various insurance companies thinking that if the car is damaged, they will receive compensation from all these companies. This is however not the case, a person will be compensated for the loss only by either both companies or by one company. This principle is referred to as principle of contribution.
Principles of insurance Oakland CA dwellers have to know are very important. Knowing these principles enables one to understand the contract comprehensively. It also prevents situations where someone does not know exactly what the contract entailed.
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