Name Muhammad islam ROLL NO 38 Class (B.com)

CHARACTERISTICS OF INSURANCE CONTRACTS

1. Personal Contracts Insurance protects insured, not the property or liability

subject to loss. Assignment provision In property insurance, if ownership of a property

changes, insurance contracts (policies) cannot be transferred to another party (buyer) without the insurer’s written consent.

In life insurance, the beneficiary or ownership of policy may be freely reassigned

2. Aleatory Contracts

A contract whose value to either or both of the parties depends on chance or future events, or where the monetary values of the parties' performance are unequal.

The insurer's obligation to pay a loss depends on uncertain events

Premium paid by Insured < Claim paid by Insurer

3.Contracts of adhesion

Insurance contracts are drafted by an insurer and an insured must accept or reject all the terms and conditions.

Insured gets the benefit of the doubt. Courts tend to construe an ambiguous term in

an insurance policy in favor of an insured. Contracts may be altered by the addition of

riders or endorsements Rider or endorsement – a document that amends

or changes the original policy. cf: Contracts of cohesion Contracts are drafted by both parties.

4. Conditional contracts

An insurer’s obligation to pay a claim depends on whether the insured or the beneficiary has complied with all policy conditions.

The insurer may not pay a claim if one or more of policy conditions are not complied.

Duties after loss – Homeowners (p. 562) Duties after an accident or loss –

Automobile (p. 585) Duties after in the event of loss or

damage – CP

5.Unilateral contracts

Only one party makes a legally enforceable promise.

Insured are not legally forced to pay premium or renew the policy