Requirements of an insurance contract

Requirements of an insurance contract

 The insurance contract is also governed by the provisions of the Indian Contracts Act,

  1872. In general, there are four requirements that are common to all valid contracts.  To

  To be legally enforceable, the insurance contract must meet these four requirements:

  1. Offer and acceptance

  2. Consideration

  3. Ability

  4. Legal purpose

  1. Must have valid offer fur and acceptance: first requirement of binding

  An insurance contract is an offer and acceptance of its terms.

  In most cases, the applicant for insurance makes this offer, and the company

  Accepts or rejects fur.  The agent only seeks or invites potential

  Insurance to offer.

  The legal offer by the applicant for insurance must be endorsed by the tender

  Premium and it should always be before starting ‘coverage’.  This

  The agent usually gives the insured a conditional receipt that he accepts

  Occurs when determined by the insurer of the applicant

  Insurer.

  In property and liability insurance, offer fur and acceptance can be verbal or

  Written.

  2. Promises must be supported by an exchange of consideration: a

  Consideration is the value given to each contracting party.  Insured

  Considering the amount of premium paid is a plus one

  Compliance with the terms of the insurance contract.  Insurer

  It is promised compensation in the event of a loss of consideration

  Certain risks, defending the insured in legal proceedings or engaging in other activities

  Such as inspection or storage services, or loss prevention and safety services,

  Or may specify the contract.

  3. The parties must have the legal capacity to contract: this requirement of recognition

  The insurance contract is that each party to the contract must be legally competent.

  This means that the parties must have the legal capacity to enter into a binding agreement.

  Parties that do not have the legal capacity to enter into agreements include:

  l Insane individuals who do not understand nature (duties and responsibilities)

  Agreement

  l Individuals intoxicated

  l Corporations operate outside the scope of their charters, bylaws or articles

  Insertion or authority

  l Minor

Agreement.  The contract should be for legal purposes: for insurance policies, this requirement

  This means that neither the contract nor the requirements of the insurable interest should be violated

 4. Do not protect or promote illegal enterprises. In other words, insurance policy

  Anything that promotes or promotes something illegal and immoral is against the people

  Interest and cannot be executed.

  Example:

  Street pushers of heroin and other illicit drugs cannot buy prinsurance

  Policy that drugs will be confiscated by the police.

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