Insurance Knowledge

What is “Insurance”?

Insurance is a mean of risk control, by diverting / transferring risks from the first party to the other party, in this case, to the insurer. The risk transfer is based on laws and universal principles, embraced by the first or other parties.

According to Commercial code article 246:

Insurance is a agreement, where a guarantor is binding to someone, by receiving a premium, to provide a compensation for him due to the loss, damage or expected-profit, which might be experienced as a result of uncertain events”

What are the basic principals of Insurance?

There are six basic principles that must be fulfilled in insurance business, namely, insurable interest, utmost good faith, proximate cause, indemnity, subrogation and contribution.

1. Insurable interest
   The legal right to insure arising out of a financial relationship, recognized at law between the insured and the subject matter of the insurance
2. Utmost good faith
   An action to disclose all facts and material facts accurately and completely in regard to an object to insure regardless if it is requested or not. For instance: Adira must have good faith to explain clearly, everything in regard with the scope of terms and conditions, and you must also provide complete and clear information regarding the insured objects or purposes.
3. Proximate cause
   “Proximate cause” Proximate cause means the active, efficient cause that sets in motion a train of events which brings about a result, without intervention of any force started and working actively from a new and independent source.
4. Indemnity
   A mechanism where Adira Insurance provide exact financial compensation to place the insured in the same financial position they were in prior to the loss. (as determined by law KUHD/commercial code article 252, 253, and re confirmed in article 278)
5. Subrogation
   Diversion of claim right from yourself to Adira Insurance after claim is paid.
6. Contribution
   Rights possessed by Adira to call for a contribution from other insurances to be together to contribute a proportionate amount of the loss, but the liability in providing indemnity for you does not have to be equal.

Why do we need Insurance?

Insurance has a main benefit to restore the insured financial position as it was before loss occurred.

Besides, insurance also reduce risk of uncertainty, can reduce financial burden caused by sudden incidents, provide the feeling of security and there are lots of other benefits.

sumber :

http://www.asuransi.adira.co.id/InsuranceKnowledge/tabid/56/language/en-US/Default.aspx

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