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Examples Of Moral Hazards In Insurance

There may be an example of first class moral hazard where the insured gives maximum cooperation to the insurers by materializing their suggestions aimed at risk improvement, or where the insured himself is very strict and particular in maintaining the property or premises with such care that the possibility of the happening of the insured event is reduced. Examples of bad moral hazards are also there where the insured fraudulently and intentionally brings about an insured event with the sole motive or making money out of insurance at the cost …

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Different Types Of Hazards In Insurance

Insurance always deals in risks. Risk is the probability of happening of an unforeseen event or contingency which is never desired. This probability of happening of the undesired event may become more certain or prominent if the subject-matter of insurance presents some peculiar characteristics facilitating the causation of the event. The cause of such event is termed as Peril. Sometimes the causation of the event may not be due to some peculiar characteristics of the subject-matter itself but may be due to the peculiar character of the insured. Hazard in …

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Examples Of Physical Hazards In Insurance

examples of physical hazards

Before discussing Examples Of Physical Hazards in insurance, let us see what does Hazard in insurance mean. Hazards generally indicate the bad elements in a risk proposed. So, a detailed knowledge thereof can only influence the decision of a prudent underwriter in deciding whether to accept or reject a risk. If to accept the risk, at what rates, terms, premiums and conditions etc. The hazards are visible from the very nature, construction and situation of the subject-matter. Some Examples Of Physical Hazards In various branches of insurance (such as life, …

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11 Legal Aspects Of Reinsurance Contracts

We have completed the various technical and operational aspects of the insurance in previous articles. Now,  attempts will be made to highlight some essential Legal Aspects Of Reinsurance Contracts around the business of reinsurance. It should be appreciated by the students that the business of reinsurance is very much within the four walls of insurance business . Therefore, most of the legal considerations applicable to the business of insurance will also equally hold good in so far as reinsurance business is concerned. The readers should also appreciate that it is …

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Application Of Reinsurance To Various Branches Of Insurance

We have written many articles on reinsurance. So we think, you have already known various kinds of reinsurance. Indications will now be made as to the proper applicability of various types of reinsurance in different branches of insurance. OK, let us have a look on the Application Of Reinsurance To Various Branches Of Insurance. Application Of Reinsurance To Various Branches Of Insurance. FIRE : Surplus treaty is most widely used. Quota share treaties are used by the newly established companies or with regard to new business of established companies. The …

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Advantages And Disadvantages Of Facultative Reinsurance

Advantages And Disadvantages Of Facultative Reinsurance

Broadly, there are two main ways through which reinsurance may be distinguished. These are, Facultative reinsurance, and Treaty reinsurance. Both types of reinsurance are having their Advantages And Disadvantages. Here I am discussing the major Advantages And Disadvantages Of Facultative Reinsurance along with how this Reinsurance works. I will discuss relative Advantages And Disadvantages Of Treaty Reinsurance later. How Facultative Reinsurance Works: Facultative Reinsurance is the original form of reinsurance. Participation by reinsurer in a risk is not prearranged through a standing treaty contract. Reinsurance has to be arranged by …

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What Are The Different Types Of Reinsurance Arrangements

What Are The Different Types Of Reinsurance Arrangements

It is probable that the reinsurer may have sufficient amounts ceded from a number of different sources and unfortunately the cession may relate to the same risk. To relieve itself from this undesirable accumulation, the reinsurer would itself have to resort to reinsurance. There are Different Types Of Reinsurance Arrangements available in reinsurance companies. Different Types Of Reinsurance Arrangements in Insurance World: Broadly, there are two main Types Of Reinsurance Arrangements. These are : Facultative Reinsurance Treaty Reinsurance Treaties are of various types and some of the important Treaty Reinsurance are …

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What Are The Main Reasons For Reinsurance

reasons for reinsurance

It is probable that the reinsurer may have sufficient amounts ceded from a number of different sources and unfortunately the cession may relate to the same risk. To relieve itself from this undesirable accumulation, the reinsurer would itself have to resort to reinsurance companies. This may be the principal reasons for reinsurance. There are some other reasons for reinsurance which are given below: i) Risk Minimization By Spreading: The basic concept of insurance is to spread the risk over as wider an area as possible as so to decrease the …

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Waiver Of The Principle Of Proximate Cause

Sometimes the application of the principle of proximate cause may be waived by insurers through policy condition. The best example here is perhaps the “standard fire policy”. The fire policy does not cover the loss due to “spontaneous fermentation”, but any resultant fire damage is covered. This is because the insurers have used the word “its own” before “spontaneous fermentation” which means that only the property subjected to spontaneous fermentation is excluded but any resultant fire damage is covered. Had the words “its own’ not been there the resultant fire …

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Rules For Application Of Proximate Cause In Insurance

To treat proximate cause as if it was the cause which is proximate in time is out of the question. The cause which is really proximate is that which is proximate in terms of efficiency. That efficiency might have been preserved although other causes might meantime have sprung up, which have not yet destroyed it or really impaired it, and it may culminate in a result of which it still remains the true efficient cause to which the event could be ascribed. With regard to pay-ability or otherwise of a …

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