What is the difference between Banking and Insurance?

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What is Insurance Coverage?

Insurance coverage is the protection of assets or life of the insured against any specified perils mentioned in the insurance policy document. The insurance coverage is the sum insured provided by the insurance company under the insurance policy.

What are the Principles of Insurance?

There are certain principles on which insurance functions in India. They are:

Utmost Good Faith: The customer and the insurance company should enter the agreement in utmost good faith. The customer should declare all the material information to the insurance company without holding any information that can affect the risk, while the insurance company or its representative should educate the customer regarding the terms and conditions of the insurance policy.

Insurable Interest: There should be proof of insurable interest at the time of taking the insurance policy. In simple words, the insured customer should suffer financially or mentally if the insured property is damaged.

Indemnity: The principle of insurance states that the insured will be placed in the same financial position as he/she was just before the occurrence of the loss. In simple words, the insurance company will pay only the claim amount to repair or replace the property and make sure that the property is in the same condition just before the occurrence of the loss. The principle of indemnity states that the insured customer cannot profit from the insurance.

Subrogation: The principle of subrogation states that the rights of the insured property would be transferred to the insurance company after the claim is paid. Once the claim is paid to the insured, the damaged property would be owned by the insurance company so that the insured cannot be benefited from both the claim amount and from the proceeds of selling the damaged property.

Contribution: The principle of contribution states that if the customer has taken more than one insurance policy for the same property, then the insurance companies would settle the claim equally or as per the sum insured selected. The customer cannot claim “full” from more than one insurance company for the same damaged property even though he/she has taken an insurance policy for the same property from more than one company.

Proximate Cause: It is an active and efficient cause in the chain of events that lead to the damage of the property. The nearby cause in a series of events would be taken into consideration before settling the claim.

Loss Minimization: The principle of loss minimization states that the customer should act appropriately to reduce the loss in case of an insured peril. Merely having insurance doesn’t entitle the customer to a claim in case of loss if it’s found that the customer didn’t act in a proper manner to reduce the loss.

What is Copay in Health Insurance?

Co-pay is the fixed amount of money is must pay each and every time when an insured person needs medication. Co-pay is the amount of claim which is to be borne by the insured customer at the time of claim settlement. Most of the health insurance policies have a co-pay clause if there are senior citizens included in the policy. Higher the co-pay amount selected by the customer lower would be the health insurance premium. Co-pay is the way of making customers liable and participating in the claim.

What is the Meaning of Insurance?

The meaning of Insurance is a contract between the insured customer and the insurance company in which the insurance company promises to settle the losses of the insured due to insured peril acting at the time of loss or damage in return for a nominal amount known as “Premium”. The insurance contract is valid for a period as mentioned in the policy document and is legally enforceable in case of deviation by either of the parties of the contract.

What are the Types of Insurance?

types of insurance include car insurance, health insurance, life insurance, two-wheeler/bike insurance, etc. these are the main insurance lobs Policybachat gives services to check our website to know more.

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Documents Required for Insurance Policies

What are the Documents required for Insurance Policy in India? Know about documents that have to be submitted at the time of Buy, Renewal, and Claim Process.

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