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Losses and its types - Law of Insurance

   Posted On :  08.05.2018 05:14 am

A loss may be either Total or Partial. Total loss may be subdivided into two classes: (i)Actual Total Loss, and (ii) Constructive Total Loss. The case of partial loss arises when the subject-matter of the insurance is partially lost. Partial loss is also of two classes: (i)Particular Average, and (ii) General Average.

Losses
 

Kinds Of Losses:

 
 
A loss may be either Total or Partial. Total loss may be subdivided into two classes: (i)Actual Total Loss, and (ii) Constructive Total Loss. The case of partial loss arises when the subject-matter of the insurance is partially lost. Partial loss is also of two classes: (i)Particular Average, and (ii) General Average.
 

Fire Insurance

 
 
A fire insurance is a contract to indemnify the insured for destruction of or damage to property caused by fire.
 

Average Clause:

 
 
It is becoming very common in policies of fire insurance to insert a condition called the average clause, by which the insured is called upon to bear a portion of the loss himself. This condition is called the pro rata condition of average. Insurable interest; the insured must have insurable interest in the subject-matter both at the time of effecting the policy and at the time of the loss.
 

The Risk:

 
 
The risk in fire policy commences from the moment the cover note, or the deposit receipt, or the interim protection is issued and continues for the term covered by the contract of insurance.
 

What Is Fire:

 
 
The word fire as used in the expression “loss by fire” is to be construed in its popular and literal sense, and means a fire which has broken bounds.

Assignment:

 
In English law policy of fire insurance can be assigned only with the consent of the insurer.

Valued Policy:

 
n the “valued policy” the insured can recover a fixed amount, agreed at the issue of the policy without the necessity for any further proof of value at the time of the fire. 

Re-Instatement Or Replacement Policy:


A clause is inserted in the policy under which the insured can recover not the value of buildings or plant as depreciated, but the cost of replacement of the property destroyed by new property of the same kind, or the insurers may themselves reinstate the property instead of paying in cash.

Consequential Loss Policy:

 
The insured is indemnified for the loss of profits which he sustains through interruption or cessation of his business as a result of fire.
 
 

 

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