The substance of a protection contract relies upon the kind of strategy the protection candidate needs and the amount he is happy to pay. The subtleties of protection arrangements are shrouded in Standard Insurance Policies. This article covers what is expected of legitimate protection contracts since substantial agreements are lawfully enforceable.
If there is an essential document between the policyholder and insurer, that is the policy. Therefore, it is unsurprising that the law specifies a series of mandatory requirements to be as unique as possible. The elements that any policy must contain are the following:
Who participates in the insurance contract?
The parties involved must identify the parties involved in the insurance contract, in addition to their domiciles and the quality in which they act (insured, insurer, etc.).
The concept which is insured
The policy must reflect the insured interest – it can be property, usufruct, etc. -. In it, you will also have to specify whether the policyholder and the insured are the same person (self-insurance) or are different (third-party insurance).
Nature of the risk
Detail the insured object and its situation
The policies specify the assets the insurance covers and where they will be located until the insurance expires. These are requirements that the policyholder already determines in the application (document before the policy). These concretions are crucial since, in theft or fire insurance, all goods not in the location specified in the policy are sometimes not covered by the insurance.
Scope of coverage
The maximum limit that the insurer will face in the event of an accident must also show.
Premium, surcharges, and taxes
As a policyholder, you have the right to have the policy reflect each concept and amount that the policyholder must pay. It is mandatory to know the total price of the insurance we hire.
Expiration, place, and method of payment of the premium
One of the critical points of the policy is the expiration date. It should reflect the day when the obligation to pay the following annuity is born if the contract extends. The form of payment is another concretion that requires of the policy that, at present, is usually in direct debit. It will also detail where this payment method will occur.
Duration of the contract and its effects
The policy must indicate the exact day and time of the beginning and expiration of its essential coverage. It assumes that the duration of the insurance sets in the policy. However, the most common is that tacitly renewable annuities hold.
The so-called insurance mediator (agent or broker) has the right to have your name or password appear printed on the portal. You will be identified at the time of your remuneration and can advise the parties if necessary.
Difference between particular and general conditions
It should note that the nine points we have just explained will always include the specific conditions of the policy. These differ according to each insurance – since they address a particular individual.
In the policy, we also contemplate the general conditions. The insurer has previously printed them. They include the rights and obligations of the parties. The requirements will be submitted to the regulations of the Insurance Contract Law and the supervision of the General Directorate of Insurance.
We hope you found what you were looking for and clarified your understanding of the critical requirement of a standard insurance policy. You need to pay attention to a few more details as these are financial matters, so nothing should be overlooked or taken for granted.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.