Basic Insurance Principles
In insurance there are 6 types of basic principles of insurable interest, utmost good faith, proximate cause, Indemnity, subrogation and contribution.
Insurable interest
The right to insure, arising from a financial relationship, between the Insured and the insured is legally recognized.
Utmost good faith
An action to reveal the accurate and complete, that all facts material (material fact) about something that will either be insured or not. Means is: the insurer must be honest with clearly explain everything about the extent of the requirements / conditions of insurance and the Insured must also provide information that clearly and correctly on the object or be the interest.
Proximate cause
it is an active, efficient cause of the incident. the cause of a result without the intervention of a start and an active source of new and independent.
Indemnity
A mechanism where the insurer provides financial compensation in the effort to put the Insured’s financial position in which he had shortly before the occurrence of loss.
Subrogation
The rights of the Insured to the charge after the insurer paid claims.
Contribution
While the insurer is the right to invite other insurer that same bear, but not necessarily the same obligations to the Insured to provide Indemnity participate.