Monday, January 28, 2008

Insurance Law-Key facts

Insurance is one of the most important industries all over the world. Insurance industry earns its revenue from premiums on policies that are paid by individuals, organizations and institutions for ensuring their lives, goods and properties. Its is the duty of an insurance company to compensate its clients for any kind of damage that may occur to their lives, goods or properties in exchange of this security money which is called premium.

There are different types of insurance policies that people but from the insurance companies to make sure that if any damage occurs to their lives, goods and properties they will be paid back monetarily by the insurance companies. That's why insurance policies are made by following a particular legal framework and that is known as the insurance law.

It is compulsory for all insurance companies in the world to follow the insurance law for making its policies and claims otherwise the documents will not be considered as valid. All duties and responsibilities to be fulfilled by insurance companies have been clearly mentioned in the insurance law and it has also been mentioned what legal steps an insurance company can take against its client for irregular on non payment of premiums. On the other hand insurance law also determines the legal framework that a client need to follow for taking any step against an insurance company for the breach of contract.

Speaking about insurance law it must be mentioned here that features in one type of insurance policy differs from the other. If you have bought fire insurance policy and a burglary insurance policy you could easily notice the difference in the features of the two. So it is very much important for a person who is ensuring his or her life, goods and properties to read the contract or the policy before signing because these are important legal documents and once you sign them you need to follow what the insurance law says. Insurance law says that an insurance contract is an agreement between an insurance company and a person whereby the person becomes entitled to get monetary compensation for any kind of damage to the thing he or she has insured. However whether a person will get monetary compensation or not depends on the happening of the event.

Insurance law also says that once an insurance policy or agreement is signed between an insurance company and a party, the insured cannot make any changes to the document. An insurance company is liable to pay monetary compensation for the things that he or she has disclosed about. So the insured cannot claim for compensation for something which he or she has bought or acquired after signing the contract.

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