4 different characteristics of insurance contracts are calculated chance, form contracts, bilateral contracts and the compensation are not determined at the time of concluding the contract except for life insurance contracts.
1. What is insurance contract?
The insurance contract is an agreement between the insurance buyers and insurance businesses, whereby the insurance buyer must pay insurance premiums, an insurer must pay the insurance money to the beneficiaries or compensation to persons insured when the insured event occurs. Unlike other types of contracts, insurance contracts have 4 basic characteristics:
2. The insurance contract is a contract of chance
The insurance contract is a means for the parties to establish a relationship with each other, but the content is mainly shifting risk from the insurance buyer to the insured recipient. Insurance buyers through insurance relationships to achieve the security, stabilization of its economic status in the case of risks appears to cause loss of life, health and property of yourself as well as other people that you shall be liable to pay damages.
3. The insurance contract is a contract according to form
This shows that the insured is not entitled to negotiate or modify the terms of the contract that essentially has businesses put in contract form. The insured person only compliance or may refuse to sign the insurance contract.
With compulsory insurance contract is type of contract stipulated by the law on insurance conditions, fees, minimum amount of insurance that organizations and individuals insured and the insurer is obliged to perform. This type of contract holders are required to participate in the case to protect the public interest, social order and safety.
With voluntary insurance contracts: insurance companies often make the content of the contract, such as premiums, the amount of insurance, event insurance, insurance conditions ... but it does not affect voluntary insured party. Finally, the right to decide on the insured or not and join the insurance businesses remain insured by the decision.
4. Insurance contract is bilateral contract
Bilateral contracts are contracts that each party has obligations towards each other.
Insurance contracts are bilateral contracts in the process of implementation by the insurance contract, the parties to implement the obligations and rights under the agreement of the insurance contract. This party's rights and obligations of the other party and vice versa.
5. Calculation of compensation in the insurance contract can not be determined at the time of concluding the contract except for life insurance contracts
The insurance relationship is formed from the time the insurance contract is in effect, but the insurer is only obliged to make payment of insurance money or to pay damages to the insured when the insured event occurs out. Ie the insured risk 's assumed only happen in the future but do not know the exact movements event happens where ever, and what the specific risk is, how much the loss ... Buying insurance is risk prevention before it occurs.
Life insurance could be covered for certain events occurring within the insurance contract but still uncertain in terms of time occurs (such as life insurance contracts for life insurance for the try death of the insured) or incidents of suicide were no longer randomized to the insured can still be insured when the insurance policy was in effect a certain period (usually from two years or more).