Contract of insurance
Usually insurer tries to get answers of the material character facts. For example, during building insurance, there are some questions: “Is there automatic sprinkler system on the each floor? What would happened, if there is no automatic sprinkler system on the earch floor, and in some floors it works faulty and insurer knows about it?” The last can answer briefly: “Yes”.
But it can mislead the insurer, and therefore the policy owner duty is to declare, that system works badly on some floors. If insurance holder didn’t give the right answer and in the sequel it would be placed by insurer the real state of things, the last would be able to turn aside from the responsibility on payment the damage, as policy holder broke the principle of the highest honesty. It doesn’t matter, that the loss according to insurance policy occured consequently from reason, that didn’t have any common with the fact of unnormal sprinkler system work – the insurer can refuse from payment of damages. The example, connected with factors of material character in life assurance, will be recent disease of the insured.
Contract of auto insurance is the contract on damage compensation. So policy holder can’t benefit from insurance compensation, payed by insurer. In this way, in property insurance, if the factory was destroyed by the fire, the insurer is not responsible in the volume of its primary cost, but pays factory cost, which it had before insurance accident.This cost can be less or more than that was paid by policy owner in the moment of purchase.
If it is insured only building, the sum paid by insurers will be limited by the cost of this: building: insurance doesn’t cover the damage after the fire. If auto insurance policy owner wanted to insure from come loss, he must make it additionally.
In some special kinds of the auto insurance the cost of the insured is ajusted and fixed in the contract in the capacity of one of the insurance terms.If the insurance object was lost or destroyed consequently to one of the reasons, against which the insurance was made, insurer is responsible in the range of agreed sum irrespective from which damage happened to policy holder. In hull insurance – it is agreed cost. In personal insurance – the sum paid in case of the insured person’s death.