Characteristics of general insurance

Business studies study module
  • It’s a contract of indemnity
  • It cannot be assigned even to ones relatives
  • The insured must have an insurable interest in the property to be insured
  • Premiums charged depends on the degree of risk, the higher the premium charged.
  • Compensation for loss can only be upto a maximum of the value of the insured property or the sum insured in case of under insurance.
  • It has no surrender value
  • It’s normally a short term contract which can be renewed periodically, usually after one year.

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