The party Insurance whose risk is passed on to the insurer is called the ‘insured’. An insurer is usually a company that is willing and able to cover the loss or damage of the insured.
Insurance is a type of contract . The periodical premiums (insured, premium) that the insurer keeps on paying to the insured are redeemable in this contract. The word ‘insurance’ comes from the meaning ‘to take responsibility’. Dr. Raghuveer has translated it – ‘Agope’. Its English synonym is “insurance”.
Insurance is actually a contract between the insurer and the insured in which the insurer gives a fixed sum of money to the insured in exchange for a fixed amount (premium) upon the occurrence of a certain event (such as the end of a certain age or death) or else Indemnifies the insured for the actual loss caused by the risk.
Thinking about the basis of insurance, it is revealed that insurance is a kind of association in which all the insured who may be the victims of the risk, pay the premium while only a few (very few) of them who actually Losses are taken, compensation is given. In fact, the risk appetite is high but only a few of them suffer losses in a given period. The insurer (company) undertakes to distribute the loss of the insured parties to the remaining insured parties.
Under what circumstances can insurance be done?
Even in gambling or betting, two persons make the same agreement that the other person will pay a certain amount of money when such an event occurs. But it cannot be called insurance because the bettor has no independent interest in the occurrence or not of the event itself. Therefore, for an insurance contract, the existence of an insurable interest is essential along with the elements of a normal contract. For example, A’s life cannot be insured by a stranger because B has no independent interest in A’s survival or non-living. But if B is A’s wife, it would be lawful for B to insure A’s life, since B’s interest in A’s survival vests.
The meaning of insurance interest is broad. The interest of each other in the survival of husband and wife is obvious. The interest of the moneylender in the life of the borrower is equally valid. This interest also becomes available to the person to whom an asset is available under a contract. Not only this, by mere possession of the property, even if the possession is illegal, the insured becomes available. For example, if a bankrupt has any property in his possession, even if that right is automatically It is illegal because after the insolvency is passed, all his property becomes the right of the insolvent – but that insolvent is also considered to be the authority to insure that property. The basis for arising out of an insurance interest through a contract can be a liability or an interest both. For example, when a person takes a house on rent, there is no responsibility for the security of that house, but since that contract provides the facility of security to the tenant, so for the insurance of the security of that house, that tenant is also insured. interest becomes available.
Insurance interest is required for an insurance contract, not only to assess the validity of the said contract, it is also necessary to comply with the rules of indemnity. There is some difference between the English law (rule) and the Indian law in this regard. According to the English law (Sea Insurance Law 1906 and Life Insurance Law 1774) the real existence of irrevocable interest is essential. But this is not the case in Indian law. According to Section 30 of the Indian Contract Law, since an agreement of gambling or betting, etc., has been held to be illegal, the insured may not in fact exist, but is reasonably expected to be made available, it may still be sufficient for the validity of the insurance contract.