INSURANCE POLICY

INSURANCE POLICY

Insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policy holder, which determine the claims which the insurer is legally required to pay. In exchange for an initial payment, known as the premium, the insurer promise to pay for loss caused by perils covered under the policy language.

Insurance contract are designed to meet specific need and thus have many features not in many other types of contracts. Since insurance policies are standard forms, they feature boiler plate language which is similar across a wide variety of different types of insurance policies.

The insurance policy is generally an integrated contract, meaning that its include all form associated with the between the insured and insurer in some cases, supplementary writing such as letter sent after the final agreement can make the insurance policy a non –integrated contract, one insurance textbook states that generally “courts consider all prior negotiations or agreements…every contractual term in the policy at the time of delivery, as well as those written afterward as policy rider and endorsement with both parties consent, are part of written policy.

The textbook also state that the policy must refer to all papers which are part of the policy, oral agreement are subject to the parole evidence rule, and may not be considered part of the policy if the contract appears to be whole.

Advertising materials and circulars are typically not part of a policy. Oral contracts pending the issuance of a written policy can occur.

OBJECTIVES OF THE INSURANCE POLICY

• creating a competitive environment that may lead to brand activities increased investment and better public awareness for the benefit of insurance companies to the society at large
• Achieving the necessary economies of a scale that will make insurance affordable and accessible
• To increase the industry and the indigenous company low retention capacity.
• To attract foreign capital intrusion into the industry for enhancing premium growth and profitability
• To enable operator to attract the ware for the strategic investment in human capital development, i.e to attract train and retrain professional that are able to utilize new technology for greater efficiencies.
• Encouraging the industry to leverage on synergies from merger and acquisition and other alignment to achieve superior product innovation deeper market penetration and product distribution.

 GENERAL FEATURES OF INSURANCE POLICY

The insurance contract or agreement is a contract whereby the insurer will pay the insured (the person whom benefit would be paid to, or on behalf of).if certain define event occur. Subject to the “fortuity principle “the event must be uncertain. The uncertainty can be either as to when the event will happen (e.g. in a life insurance policy, the time of the insured death is uncertain) or as to fit it will happen at all (e.g. in a fire insurance policy, whether or not a fire will occur at all).

Insurance contract are generally considered contract of adhesion because the insurer draw up the contract and the insured has little or no ability to make material changes to it.

This is interpreted to mean that the insurer bears the burden if there is any ambiguity in any terms of the contract. Insurance policies are sold without the policy holder even seeing a copy of the contract. Insurance contract are unilateral meaning that only the insurer makes legally enforceable promises in the contract. The insured is not required to pay the premiums, but the insurer is required to pay the benefit under the contract if the insured has paid the premiums and met other basic provision.

Insurance contracts are governed by the principle of utmost good faith uberrima fides which required both parties of the insurance contract to deal in good faith and in particular its impact on the a duty to disclose all material facts which relates to the risk to be covered. This contrast with the legal doctrine that cover most other types of contracts, caveat emptor (let the buyer beware).in the united the insured can sue an insurer in tort for acting in bad faith.