TIPS ABOUT INSURANCE

The concept of Insurance is an arrangement whereby one person- the Insurer, undertakes in return for a consideration- the Premium, to pay the policyholder, a certain sum of money or its equivalent on the happening of a certain event or upon incurring certain loss. It is a risk management platform. Impliedly, when you purchase insurance Policy, you automatically transfer your futuristic loss to the Insurer in exchange for the Premium. in this article, we shall discuss tips about insurance.

From the above, the following tips about insurance is deducible;

1. A contract of insurance exists between two distinct persons; (i.) the Insurer (2) the Insured.
2. The undertaking of the Insurer to provide indemnity upon the happening of a certain event must be legally binding one. Thus, an arrangement where the Insurer reserves discretionary right to indemnify the policyholder against loss does not qualify as insurance.
3. The undertaking of the Insurer must be to pay “a sum of money or its equivalent. Thus, there is no legal requirement that the indemnity must be in the form of monetary payment. For instance, Insurance Companies in Nigeria usually elect to repair or reinstate vehicles instead of paying the Policyholder in cash.
4. The consideration is the premium which the policyholder pays or accepts to pay. And which is usually the sum of money the policyholder agrees to pay the Insurer.

ADVANTAGES OF INSURANCE

There are enormous advantages to different classes of insurance policy. some tips about insurance benefits are below.

For instance, Life Insurance Policy operates to ensure that your dependents have financial backup in the event of your death. This will make provision for financing your children’s education and other ancillary obligations.

Furthermore, your Home Insurance Policy will afford you the protection for loses in your home.

In a similar vein, when you purchase health insurance policy for yourself and family members, it provides you coverage in the event of health and eventual hospitalization. 

Under the Car Insurance policy, which maybe comprehensive or third party liability car insurance Policy, your get coverage in the event your car sustains damage or stolen. And coverage to the third party if their property sustains damage due to the involvement of your car.

With regard to marine insurance; there is a provision for coverage against any damage or loss to your vessels or ships etc. And in which the good are transported from one point to another

Travel insurance policy provides us protection and coverage from unforeseen damages while traveling either internationally or locally.

Property insurance policy provides property protection coverage against liabilities of loss for property Owners. It therefore gives financial indemnity to the property owner or a lessee or renter of a property. And thereby ensure the continuous existence of such property in the event of damage or loss. And moreover, to any other person apart from the owner who incurs loss or sustains injury on the property.

Fire insurance provides coverage for the policyholder against any loss or damages in the event of accidental fire, lighting etc. Its outbreak is usually accidental and causes huge destruction when it occurs. Fire insurance policy may cover both movable and immovable properties. And as a result becomes a good choice of insurance policy for business owners who are usually open to risks of fire outbreak. Thus bringing such business to an end.

From the foregoing, it is conclusive that insurance policyholders enjoy a wide range of benefits.

TIPS ABOUT INSURANCE CONTRACT FORMATION.

The principles governing the formation of contracts equally govern insurance contracts. These principles are offer, acceptance, consideration and intention to create a legally binding relationship.

The offer is usually made by the intending policyholder by completing a proposal form. And thereafter forward it to the Insurer. The acceptance of the offer is usually by the Insurer accepting the proposal form of the intending policyholder on its terms. And issuing out the policy to him on which the Insurer agrees to bear the risks of a certain events in the Policy. The intention to create legally binding relationship will, as always be present where the three other elements above are there.

Assurance- means same thing as Insurance

Indemnify– to restore the victim of the loss covered by the insurance policy. This may be in the form of repairs, replacement or monetary payments.

Insurability– this is the level of acceptability of an applicant by the Insurer.

Insurance policy– this is a document issued to the insured by the insurer setting out the terms of the insurance contract.

Insured– this is the person have purchased an insurance coverage and whose risk is protected by the policy

Insurer– this means the insurance company

Lapse– This is when the insurance policy terminates for failure to pay premium

Policyholder- this is the person whose risk of loss enjoys the protection of the insurance policy.

Premium– this is the amount of money chargeable by the insurance company in exchange for coverage

Protection- this is a word operates interchangeably with Coverage to mean the insurance provided under the policy

Subrogation- denotes the right of the Insurance Company to step into the shoes of the person whom they compensate and sue any person who the compensated person could have sued

Third party insurance- the protection afforded to the Insured against liability for damage done to others or third parties