NATURE OF INSURANCE CONTRACT


An insurance contract has the following attributes

Entirety: All the terms and conditions are to be mentioned explicitly in the policy document

Personal: The contract follows the person insured rather than property

Unilateral: After the insured pays the premium, the insurer is under the obligation to pay the claim amount when the situation arises except on the ground of fraud.

Aleatory: The amounts exchanged by the insured and the insurer are unequal and depends upon uncertain future events

Uberrimae fidei: It requires both parties of the insurance contract to deal in good faith. In particular it imparts on the insured a duty to disclose all material facts which relate to the risk to be covered.

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