insurance principles

insurance principles

Essentials of Insurance

In the realm of insurance, there are six fundamental rules that need to be followed: insurable interest, absolute good faith, proximate cause, indemnity, replacement, and contribution.

insured-interest

A legally recognized insurance right that results from a financial relationship between the insured and the insured.

highest sincerity

the act of fully and truthfully disclosing, whether or not requested, all relevant information regarding a subject that will be covered. This means that the insurer has to give the insured accurate and lucid information on the scope of the insurer's terms and conditions as well as information pertinent to the insured's goals or interests.

immediate cause

An efficient cause, or the series of events that result in a particular conclusion without the participation of a beginning and operating actively from a new and independent origin, is known as an active cause.

protection against loss

a process by which the insurance company pays the policyholder money to restore his pre-loss financial situation (affirmed in Commercial Code Articles 252, 253, and Section 278).

replacement

a request made after a claim has been paid for the insured to transfer rights to the insurer.

Participation

The insurer does not owe the insured the same duties in terms of participation in indemnity, even though it is free to invite others in an equivalent manner.