Basic Provisions and Principles of The Word Insurance

Insurance is a term used to refer to an action, system, or business where financial protection (or financial compensation) for the soul, property, health and so on is reimbursed from unexpected events that can occur such as death, loss, damage or illness, which involves paying regular premiums within a certain period of time in return for a policy that guarantees such protection.

In the insurance world there are 6 basic principles that must be met:

1. Insured flowers

The right to insure, arising from financial relationships, between the insured and the insured and legally recognized.

2. Subrogation

Transfer of claim rights from the insured to the insurance company after the claim is paid.

3. Direct causes

Active and efficient causes that lead to a series of events that produce consequences without intervention are active and start from new and independent sources.

4. Contributions

The right of insurance companies to invite other insurance companies that are both bear, but it is not necessarily the same obligation to the insured to participate in providing compensation.

5. Compensation

The mechanism by which an insurance company provides financial compensation in an effort to place the insured in his financial position immediately before the loss.

6. Very good faith

The act of expressing accurately and thoroughly, all material facts about something that must be insured whether requested or not. That is, insurance companies must honestly explain clearly everything about the extent to which insurance conditions and the insured must also provide a clear and correct picture of the object or interest that is insured.

Some people consider insurance to be a form of betting that is valid during the policy period. The insurance company bet that the buyer's property will not be lost when the buyer pays the money.

The difference in fees paid to insurance companies for the amount they can receive in the event of an accident is almost the same as when someone is betting on horseback. For this reason, some religious groups including the Amish have avoided insurance and depend on the support their community receives when a disaster occurs.

In a close and supportive community where people can help each other to rebuild lost property, this plan can work well. Most people cannot effectively support the system as above and this system will not work for big risks.

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