The concept of
double insurance differs from the concept of reinsurance the following
respects:. (a) MEANING: The reinsurance business is entered into by the original
insurer with the order insurers. But in double insurance, but the insured gets
the same subject matter insured with more than one insurer or under more than
one policy with the same insurer. (b).: FILLING
CLAIM: In reinsurance , the
insured cannot be claim any part of the his loss from the insurer. But in the double insurance the insured can claims only his actual loss from each of the insurers up to the amount insured with them. ( C) . CONTRIBUTION: In reinsurance , the reinsured will claim a
part of the loss proportionate to the risk reinsured by the him with the
reinsurers . But in double insurance, each
insurer is liable to contributions
on pro-rata basis towards the loss suffered by the insured. (13).
UNDER INSURANCE: When an
insurance is taken by the for less than the actual value of the subject matter under one or more policies it amounts
to under insurance. This practice is deliberately followed to avoid the payments
of fair premium. By inserting an average clauses in the policy the under
insurance is a penalized in such a way
that the actual loss is payable in
proportion to the policy value of the subject matter: The claim payable under average clauses is
calculated as given below:
(14). ASSURANCE AND INSURANCE: Both the these two terms are used
synonymously in the context while the term insurance is a used in other types
if insurance like fire or marine. Assurance refers to a contract in which the sum assured is bound to be payable sooner of later. But a contract of insurance
is a contract for compensation of damage or loss and the question of claim
does not arise in the cases there is no loss. Thus the term insurance is used
when the risk is undertaken and I such cases the policy does not become a claim. But in case of assurance, the policy is bound to become a
claim in the stipulated manner e.
g. the insured may die in the course of
the term of the policy or else he is
bound to attain a particular age. In common usage, the terms are very widely
used to mean one and the same thing.
DIFFERENCE BETWEEN INSURANCE AND WAGERING
AGREEMENTS=Insurance contracts are not wagering or gambling
contracts, such as a betting on the turn
of a card or on horse racing etc., In a wagering contract, both parties, create a risk and
want to make money the happening or
otherwise of an event, while in the case of insurance, risk already exists and
the purpose of contract is only the transfer
the risk, . Though there is
a uncertainty and payments is made on the happening of the event in both the cases. , really is
it not so. the following are the differences between these two contracts. (1). PURPOSE:
The object of insurance is to protect the insured against loses on the
happening of some uncertain future
events. the object of a wager is a to
make profit by winning. (2). RISK:.
Insurance is meant for protection , if
the risk, which is already there,
materializes, . But the risk is oriented in wagering contracts.
INSURABLE INTEREST: The
existence of insurable interest is
necessary in a contract of insurance as
against a wagering contract, where
neither party has any pecuniary interest
a except that a created by the contract
itself. (4). UTMOST GAITH FAITH: In an insurance contract the observance of
good faith is a essential but good faith need not be observed in a wagering
contract. (5).
CONSIDERATION: There is a no
consideration in a wagering contract
whereas in case of insurance, the presents of consideration is a must. (6).
PUBLIC INTEREST: insurance contract are in a public interest and are a
encouraged by the government but
wagering contract are against public
interest. (7)ENFORCEABLE: insurance contract are valid and legally enforceable
but wagering agreements are void
and are a not legally enforceable. (8). HAPPENING OF EVENT: An event (except death),
against the risk of which the insurance is taken by the may or may not take
place at all. The wagering event is bound
to happen. (9). INDEMNITY : The
principles of indemnity applied to all insurance contract except those of the personal insurance. No such
principle applies to a wagering
contract. (10). AMOUNT:
The wagering amount is paid immediately
on the occurrence of the event . Only if there is a loss owing a to the
occurrence of the event the money will
be paid subject to a maximum limit
specified in insurance contract.