The Basic Principle Of Insurance

In the insurance world there are 6 kinds of basic principles that must be met, that is insurable interest, utmost good faith, proximate cause, indemnity, subrogation and contribution.

* Insurable interest

The right to insure, arising from a financial relationship, between the insured with the insured and recognized by law.

* Utmost good faith

An action to disclose accurate and complete, all material facts (a material fact) about something that will be insured either demanded or not. The meaning is: the person must honestly explain everything clearly 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

An active causes, which lead to efficient chain of events leads to a result without the intervention of the start and actively from a new source and independent.

* Indemnity

A mechanism which provides financial compensation insurer in an attempt to place the insured in a financial position that he had just before the occurrence of losses (KUHD chapter 252, 253 and reinforced in Article 278).

* Subrogation

Transfer request from the insured to the insurer after a claim is paid.

* Contribution

The right person to take any other person equally bear, but not necessarily the same obligations to the insured to participate in providing indemnity.