Insurance can be broadly into two classes:
1.
FIRST AND THIRD PARTY INSURANCE:
whereas third party
insurance is insuring against one’s
potential liability in law to pay damage to another. The law reflects this difference by demanding that some third party insurance should be compulsory
and also by recognized that in a practice. third party insurance
involves the third party as much as the
insured person.
2.
LIFE AND OTHER INSURANCES: This classification which is well recognized in law and meaningful in insurance circles distinguish
between life insurance or one hand and all other insurance on the other.
This classification is highlighted in the
given below. The above mentioned
types of insurance are discussed in the
pages to come:
(1) LIFE INSURANCE: It is
a contract in which the insurance company, in consideration of a
premium paid either in lump sum of
instalment undertakes to the person for whose benefit the policy is undertaken a certain sum of
a money on the death of the insured or on the expiry of the policy,
whichever occurs first. For life insurance the risk covered against
is death .
The life insurance company pays the sum assured in the event
of death. This insurance is not only a
protections but is a sort of
investment because a certain sum is
a returnable to the insured at the death or at the expiry
of a period. In contract to fire or marine insurances. life insurance does not contain the
element of indemnity because the lose
arising out of the death of a person cannot be estimated . Since the some for which a policy is taken is
assured to be paid whether there is a death or not, contract of life insurance is also often referred to
as Life Assurance. Let us now have a
look at some interesting aspect of life insurance in one. two, three
method.
GENERAL INSURANCE”
General insurance business refers
to fire , marine and miscellaneous
insurance business whether carried on singly or in a combinaion with one or more of them. Let us see each of
the components of General in the pages to come: (1)
FIRE INSURANCE: It is a contract of indemnity under which the insurance company undertakes to pay the insured for the
damage or loss caused to the property insured against fire for considerations of premium . Normally the fire insurance
policy is for a period of one year after
which it is a to be a renewed from time to time. A claim for loss by fire must
satisfy the following conditions: (a) There must be actual loss: and (b)_Fire must be accidental and
non-intentional. The risk covered by the
a fire insurance contract is the loss
resulting from fire or some cause which is the proximate cause of the loss. If
damage is caused by overheating
without ignition, it will not be
regarded as a fire loss within the meaning of fire insurance and the loss will not be recoverable from the insurer.
MARINE INSURANCE: Insurance took its birth
in the form of marine insurance. Foreign
trade in earlier days was full of several sea hazards like sinking or
sea of the ship, fire to the vessel,
storms, seizure or capture by the enemy or sea
pirates, collision, etc., Marine insurance was conceived to safeguard the traders from these
evils of the sea.. Marine insurance is
an arrangement by which the insurer
undertakes to the compensate the
owner of a ship or cargo for complete or
partial loss at sea and also the loss of
freight. Generally the following objects are sought to be insured under marine insurance. (a)
CARGO INSURANCE: When a marine
insurance taken by the cargo owner to be compensated for loss a caused to his cargo in the course of its
transmission , it is known as cargo
insurance. (b) FREIGHT INSURANCE: Marine
insurance is taken to guard against recovery of freight is called freight insurance. ( C ) HULL INSURANCE: When the ship is
the life
is a insured as a whole it is
a termed as hull insurance.