Insurance Loans: LIFE INSURANCE

MEANING OF FIRE INSURANCE

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 The term “Fire” means   
a visible or glow accompanied  by
heat. In fire insurance, that the term fire means  actual ignition mens., : burning”: The
presences  of flame is a condition  pre-requisite 
., Thus  damage by the smoke  heating, scorching of charring  without actual burning , is not
consideration  as  “Fire”.,  
Secondly  the ignition has to be
fortuitous  or accidental . But the this
applies only to the insured. If a third party wilfully  sets fire to the insured property., it is a
still accidental so far as a insured  is
concerned provided  the third party  is not a acting  with the direct connivance of the insured.,
If they the insured  himself sets fire to
the insured property, it is a certainly not accident,  in fact it is a fraud., However a fire caused
by the negligence of the insured or if he is the his employees will be payable
as so long as a  there is no element of
fraud.<br />
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MEANING OF FIRE INSURANCE:  Fire insurance is a  social device in the  insurer, in return for the premium  paid, undertakes to pay or make good loss
suffered by the insured as a result of a damage caused by the fire to the
property covered by the policy., It is a 
offered for building or a flat furniture 
, fixture, stocks  and loss of
profit (consequential loss)., It is a also 
covers losses the due to lightning 
, aircraft, damage the losses and due to 
terrorist attack, earthquake, riots, strikes, malicious damage.,  floods and landslide., It could be taken by
the  owner  of the premises to be insured., A tenant is
not eligible  to insurer rented premises.
However the tenant had the options  of
insuring the contents of the premises., 
The premium on the value of the property insured.,  </div>
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DEFINITION 
OF FIRE INSURANCE;  According to
V. R.  Bhushan and Prof. R. S. Sharma.,
fire insurance is an agreement 
whereby  one party (the insurer),
in return, for a consideration undertakes to the indemnify  the other party (the insured)  against 
financial loss which he may sustain by reason of certain  defined subject matter being damaged by the
destroyed by fire  or other defined
perils up to an agreed amount., The documents ., which contains the terms and
conditions of the contract of the fire insurance is known as the policy. The
consideration  for the contract of fire
insurance is termed as the premium., The 
subject  matter of the contract of
fire insurance  is the insured property.
The sum set forth in the contract of fire insurance is called the Insured sum.
FEATURES OF FIRE INSURANCE:  The following  are the features of the fire insurance:.  (1). A Fire insurance contract like by the
any other contract  must fulfill the
essential elements of a valid contract like offer and the acceptance., lawful
consideration  legality of object
etc.,   (2).,  A fire insurance contract  is a contract of indemnity.,  This means that in the event of loss, the
insured  can recover from the insurer the
actual amount of loss or not the maximum amount for the which the subject  matter is a insured whichever is less.,  (3). 
In fire insurance, the insured should have been insurable interest in
the  subject matter of the contract  both in the at the time of taking the policy
and the at the time of loss.,  (4).  Premium is a required to be paid the at the
time of taking policy.,   (5). Fire
insurance usually taken for any year duration but in the some cases for short
periods also.,  (6). Fire policies can be
assigned with the prior consent of the insurer.,  (7)., 
The loss must be outcome of fire or ignition only.,  (8). Nothing can be recovered under a fire
policy if the fire is caused deliberately., 
(9). In case of several policies for the same property each insurer is
entitled to contributions from other insurers. After indemnification, the
insurer is subrogated on to the  rights
and interest of the policy holders.,  </div>
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SCOPE OF FIRE INSURANCE==According of section 2  of the insurance act 1938, the scope of fire
insurance includes.,   (a). Fire
insurance business is different from other insurance business operation and
covers the risks caused by fire:   (b) In
addition to the risk cause by the fire, it also includes other reasons and
occurrences,. which can be customarily be included  among risk insured  under fire insurance contracts., Thus we can
be study the scope of fire insurance 
from two angles viz., (1) Ordinary 
scope f fire insurance and, (2), Comprehensive  scope of fire insurance., 1. ORDINARY  SCOPE OF FIRE INSURANCE:  It includes 
only those risks which define the narrower  scope of fire insurance viz., the losses
caused  by fire only. Some losses caused
by the fire and are included  in the
insurance against fire and some  losses
are left out.  (A)., RISKS COVERED UNDER
FIRE INSURANCE:  The risk causing
losses  have to be stated in the fire
policy  and only these risks are
indemnify  are by the insurance company.,
in case of the loss.,  The following
risks caused by the fire are generally included in the fire insurance.,  (a) Fire or ignition: (b)., Blasting of
boiler  used for household  cooking.,  ( C ) Blast of gas etc,. used for the purpose
of lightning  and heating in any  building (not being  an industrial concern or factory using gas
for purpose other than lighting  and
heating).,  Above mention blasts causing
fire must be uncertain and accidental., 
(B) RISKS NOT COVERED BY FIRE INSURANCE:   There are certain risks for the which
insurer do not indemnify the insured  in
case of loss.,  They are as following
.,  (a). 
Loss, durations,  damage to
precious stones and metal artistic goods and 
article ,maps., stamps., cheques., 
account. books archieves  and rate
documents  etc.,  (b)., Loss, destruction or damage caused by
riot.,  civil disturbances , revolutions
, war, aggression, internal emergencies, storms,  cyclones., etc.,  ( C ). 
Spontaneous fire in jungle or bushes., 
(d). Spontaneous  combustion
caused by the chemicals.,  (e) Theft
during fire or after break out the  of
fire.,  (f). Compulsory  burning of goods are or properties  by the orders of Government  or court’s 
decision.  </div>
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COMPREHENSIVE  SCOPE OF FIRE INSURANCE: Numerous fire
policies have been introduced  to cover
various types of the risks allied to the risks of fire. Coverage of such risks
under the ambit of the fire  insurance
has been widened the scope of fire insurance. Some special  policies have helped  in a great way in broadening the scope of
fire insurance in the following manner:  
(A). By including the included perils and risks:   (B). 
By including  consequential losses
and the other indirect fire risks., In the first category such excluded
risks,  which cannot be  insured under general insurance
schemes.,  have been brought under the
cover the of fire insurance. Such policies 
are called  special insurance
relating  to spontaneous  combustion earthquake  blasts., etc.,  In the second category  the indirect 
risks or losses are covered. Such risks are or losses are also  know as par consequential  risks or losses. Expenses after at the
fire  rehabilitation, expenses  of the burnt factory, expenses of reorganizing
the proper  production etc., are some of
the  examples  or such risks or losses. Such risks have been
through  brought under the cover of fire
insurance. Generally  insurance.
Generally consequential  loss insurance
and profit and loss insurance policies cover such indirect  risks., 
HAZARDS IN FIRE INSURANCE:  Fire
loss is the result of two types of hazard: 
(1). PHYSICAL  HAZARDS:  It refers to the inherent  risk of the fire in the property which may be
on account  of the situation,  inflammable nature, constructions artificial
lighting and heating, lack of the  fire
extinguishing  is a appliances,
etc.,  Fire insurance, providers
protections to the property against the occurrence of fire, an unavoidable
physical hazard.  (2).  MORAL HAZARD: The term  Moral Hazard 
refers to the wilful and melicious setting on fire of on the
property  by the owners  or some body else. Moral hazard may be in
anyone of the following forms:  (a) IN
CENDIARISM:  It refers to the deliberate
destruction of one’s own property by fire. Some insured indulge  in such activities  to realize the insured amount from the
insurer.  (b). ARSON: It refers  to setting on fire the property of the
insured by the some other persons. Some persons may set fire to property of
others with a view to getting a reward for information  about the break out of the fire or
assisting  in extinguishing it. ( C ).
PASSIVE DISHONESTY:  It refers to the
wilful neglect to the by the insured to take proper action for
extinguishing  fire and his
carelessness  during the occurrence of
fire</div>
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MEANING OF FIRE INSURANCE

The term “Fire” means a visible or glow accompanied by heat. In fire insurance, that the term fire means actual ignition mens., : bu...

FUNDAMENTAL PRINCIPLES

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 (1) PRINCIPLE OF CO-OPERATION:
The insurer  collects premium from the
insured in a  pool and pays their claims
out of the pool. Th insurers  is an
associations  of persons  who pays the claims out fits of it's a pooled
money. Thus insurance  is based  on the principles  of co-operations  . According 
to the Reigal  and Miller,.
“Insurance” is pre-eminently social in nature. It represents  and the highest  degree of co-operations for and mutual
benefits,   (2).  PRINCIPLES OF PROBABILITY: The  occurrence 
of risk in each type  of
insurance  is a  estimated 
through of the theory  of
probability  for which the insurer
follows the theory of large  numbers. The
insurers  collect the data of the
previous happening  taking a  large number of years into
considerations  and forms an idea about
the  incidents in future. Life
insurance  company  prepare the mortality  tables and calculate  the premium accordingly.   (3). 
PRINCIPLE OF UTMOST  GOOD<br />
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FAITH OR
UBERRIMAE  FIDEI : insurance contractors  are based upon mutual  trust and confidence  between the insurer and insured. Utmost good
faith requires  each party to tell the
other “ the truth” the whole truth and nothing but them truth”. It means that
the parties  to the contract  must take a full disclosure  of all the material facts and a
information  relating to the contract.
Examples of material facts in various classes of insurance  are: 
Motor: Details of any young driver:. 
Life:  Details  of Heart diseases. The obligations of
disclosing  material facts ends when end
the contracts of insurance , is concluded 
with the insurance  of the cover
not the or a policy and such obligation again arises at the time of renewal of
policy. However in some one cases the insured is exempted  from disclosing  the following material  facts and a as such principles  of utmost good faith does not apply.(a) .
Facts of the common or public 
knowledge.  (b) . Facts which  tend to the reduce the risk.  ( C ). Facts embodies  in the policy itself.  (d). Facts which relate to the law of the
country.  (e). Facts waived of by the
insurer.  (f). facts which the insurer
fails to notice  on a survey, and,. (g).
Facts known after the affecting of the insurance  contractors, . The various  circumstances 
under which the parties may be guilty of breach of utmost good faith are
given below.  (a).  Non-disclosure -omission to disclose  unintentionally.  (b). Concealment intentional  suppressions 
of a fact.   ( C ).  Innocent 
misrepresentation – Inaccurate statement without any fraudulent
intention and.,   </div>
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 (d). Fraudulent
Misrepresentation  Inaccurate statement .
Where there is breach of the duty of the utmost good faith, the contract  may be either void, or voidable at the
insurer’s  potions,. If there is a
fraudulent misrepresentation, the contract is void., But in the case of the
innocent misrepresentation, the premium is returnable .<br />
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(4).  PRINCIPLE OF INSURABLE INTEREST:  For an insurance contract  to be valid the insured should have be an
insurable interest in the subject matter of insurance. The insurable
interest  is the pecuniary interest
whereby the insured is benefitted by the existence of the subject matter and is
prejudiced  by the death or damage of the
subject matter. The subject matter of insurance may be a property or life or
legal liability. The insurable  interest
to be valid must be recognized as such under the law in operation in the
country  and must satisfy  the following conditions: (a). There must be
a physical  object like life or property
as the subject matter of insurance which is likely to be destroyed.  (b). the person desiring to insure (insured)
must lose of gain money if the subject matter is lost or saved from future  events like death or fire etc.,  ( C ). 
The monetary relationship subject 
matter and the insured is recognized in law. (d).  There must be possibility  or chance of a loss due to uncertain future
event.  The insurance contracts  without insurable  interest have no sanctions of the law as they
amount of the speculations.  Generally
the following persons have an insurable interest on the subject matter of
insurance:.  A child has an insurable
interest in the life of his father;.  A
person has unlimited insurable 
interest  in his own life.  A husband has an insurable interest  in the life of his wife.   A wife has it in the life of her
husband.  </div>
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 A creditor  has an insurable interest. to the extent of
his debt, in the life of his debtor. A partner in business  has an insurable interest in the life or
lives,  of his co-partner  or , co-partners.   A company has an insurable interest in the
life of a senior officers whose death may seriously affect the profits of the
company.   The time when insurable
interest should exist  differs  according to the nature of insurance. In life
assurance, the assured should ave 
insurable interest at the time the contract was entered into. In marine
insurance, it is a should be present at the time of loss. But in the fire
insurance, insurable  interest should be
present not only </div>
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at the time of the a taking a fire policy, but also at the
time of loss.  (5).  PRINCIPLES OF INDEMNITY:  The term indemnity  means making up the loss. Literally  it means, “security against damage to then or
loss  or compensations  for loss’. All contractors of insurance
except life and personal accident and sickness insurance, are contract of
indemnity. According to this principle the insured should be placed in the same
financial positions as a far as  possible
after a loss at the occupied immediately before its  occurrence. The insured  will neither gain nor loss. In order other
words, the insurer will pay only the actual loss suffered  by the insured  I, e, 
the insurer will pay not pay  the
assured amount but only the actual loss suffered by the insured.  For example if a person has insured  a cargo for Rs. 40,000 and if a  part of the goods of Rs.  7,000 is destroyed the insurer will pay only
Rs. 7,000 and not Rs. 40,000., Thus this principles ensures are supposed  to be satisfied in full for the
applications  of the principles
indemnity.   </div>
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(a).  The insured has to prove that he will suffer
loss on the insured matter at the time of happening of the event and the loss
is actual monetary loss. (b).  The amount
of compensations  will be the amount of
the insurance. Indemnifications  cannot
be more than the amount insured.  (
C)  If the insured  gets more amount the than the  actual loss, the insurers has right to get
the extra-amount  back.  (d). If the insured  gets some amount  from third party , after being fully
indemnified  by insurers the insurer will
have right o receive the entire amount paid by the   third party</div>
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FUNDAMENTAL PRINCIPLES

(1) PRINCIPLE OF CO-OPERATION: The insurer collects premium from the insured in a pool and pays their claims out of the pool. Th insure...

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MEANING OF FIRE INSURANCE

FUNDAMENTAL PRINCIPLES

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