Contracts of indemnification include insurance contracts
Contracts of indemnification include insurance contracts. Except for life, personal accident, and sickness insurance, the principle of indemnification is applicable to all forms of insurance. This means that the guaranteed will get full compensation, but never more than the policy’s face value, in the event of a loss against which the policy has been made. While the insurer agrees to cover the loss, the insured is not permitted to profit from the loss.Insurance contracts that require the insurer to pay the insured a set sum upon the occurrence of the event insured against, regardless of whether the insured experiences a loss, no longer qualify as indemnity contracts. A contract for life insurance is not an indemnity contract. When a contingency occurs in a life insurance policy, the insurer is responsible for paying the amount stated in the policy (death, or expiry of a certain period).
Does it apply to all types of insurance?
Every insurance contract must be supported by insurable interest. Insurable interest must exist at the moment the policy is implemented in the case of life insurance. It’s not required that the guaranteed likewise have insurable interest when it reaches maturity.
ADVERTISEMENTS:
An insurable interest must exist in the case of fire insurance both at the time of insurance and the time of loss. Insurable interest must be present at the moment of the loss in the case of marine insurance. At the time of insurance, it might or might not be present;