Thursday, January 15, 2009

The Insurance Contract in Plain English

An insurance policy is a legal contract, and every contract contains four basic components:

1. One person (or party, in legal parlance) must make an offer, and the other must accept it.

2. Both parties must be of legal signing age and mentally competent.

3. The subject matter or activity covered in the contract must be legal.

4. Each party must assume some obligation toward the other or give something of value like money or a promise to the other.

So how does this work with an insurance contract? The insurance company makes an offer to provide auto insurance, for instance to you. Let's say you sign the insurance policy. Now, assuming you are old enough and not insane, you must follow the rules and procedures in the policy. You must also pay the company some money a premium for the insurance. In return, the company must pay you for certain costs if you have an auto accident and if those costs were spelled out in the contract.

6 comments:

  1. Today money making is not an easy task. I think all the people should be very careful when buying a life insurance policy, because the aim of securing life coverage is to assure your family's financial future on the event of your unexpected death. Therefore, you have to find the best insurance company and then I sagest to you the Allahabad Insurance company is the best for you that will give your beneficiaries sufficient protection with minimum cost premium.

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  2. The Allahabad insurance company is just like anywhere else in the country. Like anywhere else, it is required of anyone who has a loan on their home education car etc. For a lot of people it is automatically taken out of their monthly mortgage payment.

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  3. A liability insurance policy is not intended to provide policyholders a means to shift to the insurer their separate, voluntarily undertaken contractual obligations. Private company D&O insurance policies generally embody this principle in a separate exclusionary provision. However, the wording of the exclusionary clause can substantially affect the scope of coverage otherwise available under the policy. In particular, the expansive reading given certain exclusionary language in recent cases suggests that a more narrowly constructed exclusion would more appropriately address the concern that the provision was originally intended to address.

    Please visit it at link:: insurance contract form

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  4. i think this will work more precisely..
    thanks for sharing...

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  5. Great ! Thank you so much for explaining the insurance contract in a simple language. I was facing so much difficulty in understanding the language written in my insurance contract. Now it will be easy to understand.
    liability insurance companies

    ReplyDelete

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