In insurance, an insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claim that the legal person is legally obliged to pay. In return for an initial payment, known as a premium, the insurer pledges to cover the harm caused by the hazard covered by the policy language.
Insurance contracts are designed to meet specific needs and thus have many features not found in many other types of contracts. Because insurance policies are a standard form, they feature similar boilerplate languages ​​in different types of insurance policies.
The insurance policy is generally an integrated contract, which means that it covers all forms related to the agreement between the insured and the insurance company. However, in some cases, complementary writings such as letters sent after the final agreement may make the insurance policy an unintegrated contract. An insurance textbook states that generally "the court considers all previous negotiations or agreements... any contract terms in the policy at the time of delivery, as well as subsequently written as drivers and support... with the agreement of both parties, are part of a written policy ". The textbook also states that the policy should refer to all papers that are part of the policy. Oral agreements are subject to the rules of parole evidence, and can not be considered as part of the policy if the contract appears intact. Creatives and circulars are usually not part of the policy. An oral contract pending the issuance of a written policy may occur.
Video Insurance policy
General features
An insurance contract or agreement is a contract in which the insurer promises to pay benefits to the insured or on their behalf to a third party if a specified event is determined to occur. Subject to "accidental principle", the event must be uncertain. Uncertainty can be when the event will happen (for example in a life insurance policy, the death time of the insured is uncertain) or whether it will happen at all (eg in a fire insurance policy, whether the fire will happen at all).
- An insurance contract is generally considered an adhesion contract because the insurer withdraws the contract and the insured has little or no ability to make material changes to it. It is interpreted that the insurance company bears the burden if there is ambiguity in the terms of the contract. Insurance policy is sold without policyholders even see a copy of the contract. In 1970, Robert Keeton suggested that many courts actually apply 'reasonable expectations' rather than interpreting ambiguity, which he calls 'reasonable doctrine of hope'. This doctrine has become controversial, with some courts adopting it and others explicitly rejecting it. In some jurisdictions, including California, Wyoming, and Pennsylvania, the insured is bound by clear and conspicuous provisions in the contract even if evidence indicates that the insured does not read or understand it.
- The insurance contract is Updating because the amount exchanged by the insured and the insurance company is not the same and depends on an uncertain future event. In contrast, the usual non-insurance contract is commutative because the amount (or value) exchanged is usually intended by the parties to be more or less the same. This distinction is very important in the context of exotic products such as limited risk insurance that contain "replacement" provisions.
- The insurance contract is unilateral , which means that only the insurer makes a legally enforceable promise in the contract. The insured is not required to pay the premium, but the insurance company is required to pay benefits under the contract if the insured has paid the premium and meet other basic provisions.
- The insurance contract is governed by the principle of fully goodwill (uberrima fides) which requires both parties of the insurance contract to deal in good faith and in particular it instills on the insured the obligation to disclose all material facts related to risks to be discussed. This contrasts with the legal doctrine that covers most other types of contracts, caveir emptor (let the buyer beware). In the United States, the insured can sue the insurance company in a lawsuit for acting in bad faith.
Maps Insurance policy
Structure
Insurance contracts are traditionally written based on each type of risk (where risks are defined very narrowly), and a separate premium is calculated and charged for each. Only individual risks are clearly defined or "scheduled" in a closed policy; therefore, these policies are now described as "individual" or "schedule" policies. This system of named "traps" or "specific hazards" proves untenable in the context of the Second Industrial Revolution, where a typical large conglomerate may have dozens of types of risks to be insured. For example, in 1926, a spokeswoman for the insurance industry noted that the bakery should buy separate policies for each of the following risks: manufacturing operations, lifts, timsters, product liabilities, contractual obligations (for spur lines connecting bakeries to nearby trains) , location responsibility (for retail stores), and owner protection responsibilities (due to negligence of contractors hired to make building modifications).
In 1941, the insurance industry began to shift to the current system where closed risks were initially defined broadly in "all risk" or "all amount" agreements insuring on common policy forms (eg, "We will pay all insured amounts to the legal obligation to pay as damages... "), then narrowed down by the subsequent exemption clause (for example," This insurance does not apply to... "). If the insured wants warranties for the risks incurred by an exception on the standard form, the insured may sometimes pay an additional premium for approval of a policy that overrides the exceptions.
Insurers have been criticized in some quarters for the development of complex policies with layers of interaction between clause coverage, conditions, exceptions, and exceptions to exceptions. In the case of interpreting an ancestor of the "operating-finished hazard operation" of the modern clause, the California Supreme Court complained:
Part of the insurance contract
- Declaration - identify who is insured, the insured's address, the insurance company, what risks or property is covered, the policy limit (insurance amount), the applicable deductible, the policy period and the amount of the premium. This is usually given on a form filled by the insurer based on the insured application and attached above or included in the first few pages of the policy.
- Definitions - Define important terms used in other policy sections.
- Insure agreement - Describes the hazard involved, or assumed risk, or nature of coverage. This is where the insurance company makes one or more promises to indemnify the insured.
- Exception - Takes coverage of the insure agreement by describing the property, hazards, hazards, or losses arising from special causes not covered by the policy.
- Conditions - These are special provisions, rules of conduct, duties, and obligations that the insured must adhere to for coverage to be cut off, or must remain in compliance with to keep the applicable coverage. If the policy conditions are not met, the insurer may refuse the claim.
- Policy form - Definition, guarantee agreements, exclusions, and conditions are usually combined into one integrated document called policy form, coverage form, or coverage section. When some coverage forms are bundled into one policy, the declaration will state as much as possible, and then there may be additional declarations specific to each coverage form. Traditionally, policy forms have been rigidly standardized so they have no free space to fill. Instead, they always clearly refer to the terms or amounts listed in the declaration. If the policy needs to be adjusted beyond what is possible with the declaration, then the underwriter attaches support or a rider.
- Validation - Additional forms attached to policies that modify them in several ways, either unconditionally or for any provision. Legalization may make the policy hard to read for non-lawyers; they can revise, extend, or delete clauses that lie many pages earlier in one or more coverage forms, or even modify one another. Because it is very risky to allow nonlawyer underwriters to directly rewrite policy forms with word processors, insurance companies usually direct the guarantor to modify them by attaching the support previously approved by lawyers for various general modifications.
- Riders - A rider is used to convey the provisions of policy amendments and amendments thus becoming part of the policy. Motorists are dated and numbered so that both the insurance company and the policyholder can determine the terms and levels of benefits. General drivers for medical plan groups involve name changes, changes to eligible employees classes, benefit level changes, or the addition of managed care settings such as Health Maintenance Organization or Preferred Provider Organization (PPO).
- Jacket - This term has several different meanings and is confusing. In general, this refers to several sets of standard boilerplate conditions that accompany all policies at the time of delivery. Some insurance companies refer to the standard document package that is shared across the family policy as a "jacket". Some insurance companies extend this to include policy forms, so only those parts of the policy that are not part of the jacket are declarations, endorsements, and drivers. Other insurers use the term "jacket" in a way that is closer to the usual meaning: a binder, envelope, or presentation folder with pockets in which the policy can be sent, or a cover sheet for which the policy form is bound or stapled above the policy. The standard provisions of boilerplate are then printed on the jacket itself.
Industry standard form
In the United States, property and casualty insurance typically use the same or even identical language in their standard insurance policies, developed by advisory organizations such as the Insurance Services Office and the American Insurance Services Association. This reduces the regulatory burden for the insurance company because the policy form must be approved by the state; it also allows consumers to more easily compare policies, even at the expense of consumer choice. In addition, when policy forms are reviewed by the courts, interpretation becomes more predictable because the court describes the interpretation of the same clause in the same policy form, rather than the different policies of different insurance companies.
However, in recent years, insurance companies have increasingly modified the standard form in a company-specific way or refused to adopt changes to the standard form. For example, reviews of home insurance policies find substantial differences in various provisions. In some areas such as directors and officers of liability insurance and private umbrella insurance there is little standardization across the industry.
Manuscript policies and endorsements
For most insurance policies, the only page that is very written specifically for the needs of the insured is the declaration page. All other pages are standard forms that refer back to terms defined in the declarations as needed. However, certain types of insurance, such as media insurance, are written as manuscript policies , which are conceptualized from scratch or written from a mix of standard and nonstandard forms. By analogy, policy support that is not written on a standard form or whose language is specifically written to fit the special circumstances of the insured is known as script support.
References
Source of the article : Wikipedia
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