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Everything you should know about insurances


What is insurance?

It is an insurance contract whereby the insurer undertakes, by collecting a premium, to compensate for damage or to pay a sum of money upon verification of the eventuality provided for in the contract. The insurance contract may have as its object all kinds of risks if there is an insurable interest, unless expressly prohibited by law.

The policyholder is obliged to make the payment of this premium, in exchange for the coverage granted by the insurer, which prevents him from facing a greater financial loss, in the event that the loss occurs.

The insurance contract is consensual; The reciprocal rights and obligations of the insurer and the policyholder start from the time the convention has been concluded, even before the “policy” or document that reflects data and conditions of the insurance contract is issued.

When making an insurance contract, an attempt is made to obtain economic protection for goods or people that could suffer damage in the future.

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What is the Premium?

The premium is the cost of insurance established by an insurance company calculated on the basis of actuarial and statistical calculations taking into account the frequency and severity of the occurrence of similar events, the history of events that occurred to the client, and excluding the internal or external expenses that said insurer has.

What is a Policy?

The policy is the written instrument in which the conditions of the contract are stated. The policy is the main document of the insurance contract, where the rights and obligations of the parties are stated, it is a private document drawn up on several pages.

insurance policy

Who is the Insurer?

The insurer is the legal person that assumes the risk. It is duly authorized according to the laws and regulations.

What is the conditional obligation of the Insurer?

It is the duty of the insurer to pay compensation to the beneficiaries in the event of a claim, according to the amounts, terms and conditions established in the contract.

What obligations does the Insurer have?

In addition to delivering the policy to the policyholder, the insurer has an important obligation which, in turn, is an essential element of the insurance contract: the payment of compensation. This is carried out after the insurer analyzes the situation of the claim based on the current policy and its annexes, determining that there is coverage.

A sample of the good faith of the insurer is to present the reasoned and reasoned objection, that is, to inform the client in writing of the non-payment of the compensation if there is something that indicates it; This can occur in various cases, including not having the coverage that affected the loss, being out of date or not having paid the premium within the normal term; Likewise, the insurer has a term to object to the claim, and its lack of compliance may subject it to an executive (legal) process, in addition, it will have to pay default interest at the maximum rate in force at the time the payment is made. (art. 1080 mod. law 45/90).

Doubt, conjecture or suspicion are not enough reasons for the insurance company to stop complying with its main obligation, which is to indemnify the loss. The responsibility of the insurer is to collect all kinds of evidence, documents, testimonies so that, with solid foundations, you can deny a claim.

Who is the Policyholder?

The policyholder is the natural or legal person who contracts and subscribes the insurance policy, on his own account or that of a third party, assuming the obligations and rights established in the contract. It seeks to transfer a certain risk to a third party (insurance company) in order to compensate him or a third party for damages or losses that may derive from the occurrence of an uncertain event on the date of the insurance contract. For this purpose, they must pay a remuneration (premium) to the insurer.

What are the obligations of the Policyholder?

Make a sincere statement of the facts or circumstances that determine the state of risk, according to the questions asked by the insurer.

Maintain risk status. If there is any change in the risk conditions, the policyholder must report this new circumstance to the insurance company, within a stipulated period. Pay the premium. The initiation of the validity of the policy is conditional on the payment of the premium. This means that the first payment is made at the same time the policy is taken; subsequently, for renewal, the payment deadline will be the same due date or earlier if the policyholder wishes. If it occurs, demonstrate the occurrence of the claim and notify the insurance company within three days after it.

Who is the Insured?

The insured can be defined as the owner of the area of ​​interest that the insurance coverage concerns, and of the right to compensation that in due course is satisfied that, in certain cases, can be transferred to the beneficiary.

It is the natural or legal person to whom the occurrence of the loss will affect more directly. In short, it is the one on whose head or property the consequences of the accident will fall. The figure of the insured is essential within the insurance contract. Because just as it is not possible to conceive a contract of that nature without the existence of a risk to cover or it is not feasible to think of a legal business of the aforementioned nature without there being a person or final recipient of the guarantee that is agreed, and whose interests , protected in this way, they are the efficient cause of the contract.

Who is the Beneficiary?

The beneficiary is the person who will receive the benefit of the insurance when the event contemplated in it occurs (without being insured). It is the one on whom the benefits of the agreed policy fall, by express will of the policyholder. The designation of the beneficiary responds to pension plans that correspond to personal insurance, especially life and personal accident insurance, in the event of the death of the insured.


What is Insurable Risk?

In the language of insurance, the term risk is used to express two different ideas interchangeably. On the one hand, risk as the insured object; on the other hand, risk as a possible random occurrence of an event that produces an economic need and whose real appearance or existence is prevented and guaranteed in the policy. In the latter case, the risk obliges the insurer to make the corresponding benefit or compensation. Risk: uncertain event that does not depend exclusively on the will of the policyholder, the insured or the beneficiary and whose performance gives rise to the insurer’s obligation (art. 1054 Commercial Code).

What is a Claim?

It is the concrete manifestation or realization of the insured risk, which produces damages covered by the policy up to a certain amount.

What does it mean for a contract to be random?

An insurance contract is random because there is no certainty when the insured risk may occur; In other words, the eventuality for which the insurance is taken depends on a future and uncertain event. Random: one of the attributes of the insurance contract, which is that its exercise depends on a fortuitous event (chance).

What is the successive performance of the contract?

This last characteristic refers to the fact that the contract is not executed immediately, but is carried out during predetermined and continuous periods, generally one year. During that time the company assumes the insured risk and covers all events. In short, the execution is continuous and not instantaneous. Validity: term that begins with the policy initiation date and ends on the expiration date.

Characteristics of an insurance contract

The interpretation of the rule made by the magistrates is called jurisprudence. The interpretations of the writers or legal scholars are called doctrine. According to jurisprudence and doctrine, the characteristics of a contract for the Integral Kilometers to Enjoy program are: adherence, good faith par excellence, its merely compensatory nature and in consideration of the person.

We will study these characteristics below:

What does Accession mean?

Adherence, as a characteristic of a contract, means that when purchasing the insurance, the client accepts the coverages, clauses and exclusions established by the insurer in the policies. That is, if he wants to acquire the policy, he must accept and accept those conditions.

What does Good Faith mean par excellence?

For the Supreme Court of Justice, good faith translates into acting with loyalty, rectitude, and honesty. That is, it is an attitude guided by a spirit of justice and equity.

Good faith must be present in all types of contracts. However, this concept acquires, in the insurance field, a special connotation because, unlike contracts in which the ability to negotiate may be protected by law, in our case the basis is good faith, both for clients as well as the insurance company, and those who do not act in accordance with it are drastically sanctioned.

An insurance contract is in good faith par excellence. This means that both the insurer and the policyholder must provide all the necessary information at the time of application and issuance of the insurance. This principle allows insurance business to be conducted on the basis of mutual trust, stability and credibility. This also means that any breach of good faith is penalized.

What is an Indemnity?

Sum that, limited to the value agreed in the policy, covers damage suffered by the insured property in a loss. It is calculated based on the commercial value or replacement value, and taking into account the date of occurrence of the loss. It is also the effective amount of the patrimonial damage suffered by the insured or the consequence of a loss (art. 1079 and 1089 of the Commercial Code).

What is an indemnification contract?

An insurance contract is only intended to compensate, or repair the economic damages that the insured suffers a loss. Insurance, in no case, is a source of enrichment and it cannot be used to obtain profit.

In other words, the insurance seeks for the insured to recover from the economic damage suffered as a result of a claim against whose risk they were insured.

What does it mean for a contract to be based on consideration of a person?

When taking out insurance, the moral element plays a very important role. When the insurance company receives an application, it analyzes the qualities of the person to be insured and. Based on its study issues a policy. Therefore, it is said that insurance companies write the policy in favor of a particular person.

Without knowing and studying the qualities of the people who request insurance, the insurer cannot define the conclusion of a contract.

The contract is of a personal nature and for this reason, it effects cease when the insured sells, assigns or transfers the vehicle to another person. Naturally, this new person will be able to take another policy in your name.

What is reluctance?

Voluntary omission. The policyholder is obliged to transparently declare the facts or circumstances that determine the state of the risk. Evidence on the inaccuracy in the account of the reluctance is circumstances that induce the relative nullity of the insurance. The omitted circumstances could have established more onerous conditions at the initial moment of the conclusion of the contract.

What is a Claim?

Demand made by the insured to the insurer due to the occurrence of an accident, in accordance with the terms and conditions defined in the contract.

The insured must prove the occurrence of the loss, as well as the amount of the loss, if applicable. Therefore, you must obtain and deliver all the details, books, receipts, invoices, supporting documents, minutes, and any information that the insurer is entitled to require with reference to the claim, origin, cause, and circumstances under which the losses occurred. In this way, the liability of the insurer or the amount of compensation can be established.