Basic Principles of Insurance

Insurance industry, both general insurance and life insurance, have the principles to guide the implementation of insurance activities wherever located.

Insurable Interest
You said to have the interests of the insured object if you suffer financial loss in case of disasters that cause loss or damage to the object. Financial interests allows you to insure your property or your interests.
In the event of disaster for the insured object and prove that you do not have a financial interest of the object, then you are not entitled to receive compensation.

Utmost Good Faith
What this means is that you are obliged to inform clearly and accurately about all the important facts related to the insured object. The principle of the program to explain the risks that are guaranteed and which are excluded, all terms and conditions of coverage are clearly and accurately. The obligation to provide important facts apply:
Since the agreement of the insurance contract insurance contracts be discussed until completed, ie when we approve the contract. At the time of renewal of insurance contracts.
In the event of a change in insurance contracts and on matters that are related to those changes.

Indemnity
If the insured object exposed to the disaster that caused damage we will pay compensation to restore your financial position after the loss to be equal to the moment before the loss. Thus you are not entitled to damages greater than the losses you suffered.
Example:
Vehicle market price of 100 million dollars, insured for 100 million dollars. Case of natural disasters so that the vehicle is:

1. Lost, and the market price of the vehicle at the time:
* 100 million dollars, then you will receive compensation of 100 million dollars,
* 125 million dollars, then you receive compensation for the insured value, ie 100 million dollars,
* 75 million dollars, then you receive compensation for the market price, which is 75 million dollars.
2. Damaged by accident, then the cost of repairs, replacement parts, labor workshop will be entirely our responsibility so that a maximum of 100 million dollars.
Some of the compensation payment that apply:
Payment in cash, or
Repair, or
Replacement or
Remediation.

Subrogation
Subrogation principles stipulated in Article 284 of Act Book of Commercial Law, which reads: "If an insurer has to pay full compensation to the insured, the insurer will replace the insured in any case to sue a third party who has caused loss to the insured".
In other words, if you are experiencing losses due to negligence or a third party and we, after providing compensation to you, would you replace in a file charges to third parties.

Contribution
You can only insure the same property to several insurance companies. But when there is loss of the insured object then automatically applies the principle of contribution.
Contribution principle means that if we had paid full compensation you're entitled to, then we reserve the right sue other companies that involved an insured (jointly insurance your belongings) to pay part of their losses in the amount equal with the amount of coverage of the closing.
Example:
You insure single unit residential buildings for 100 million dollars to the three insurance companies:
PT Insurance A = USD $ 100,000,000.00
PT Insurance B = USD $ 50,000,000.00
PT Insurance C = RP 50,000,000.00
Total = USD 200,000,000.00

When the building burned down (total loss) then the maximum compensation you get from:
PT Insurance A = (100,000,000 / 200,000,000) x 100,000,000 = Rp. 50.000.000,00
PT Insurance B = (50,000,000 / 200,000,000) x 100,000,000 = Rp. 25.000.000,00
PT Insurance C = (50,000,000 / 200,000,000) x 100,000,000 = Rp. 25.000.000,00
Total = USD 100,000,000.00
Means the amount of compensation you receive from the insurance company 3 is not USD. But USD 200,000,000.00. 100,000,000.00 according to actual house prices.

Proximate Cause
If the interests of the insured suffered natural disasters or accidents, so first we'll look for the causes of an active and efficient driving an unbroken chain of events that ultimately there are natural disasters or accidents.
A principle which is used to find the cause of loss of active and efficient is: "Unbroken Chain of Events" is a series of chain of events which are not interrupted. For example, the case of personal accident claims the following:
Someone walk in highway driving at high speed so that the car out of control and overturned.
Seriously injured and taken hospital.
Not long after the victim died.
Of the incident is known that the victim cause proximate driving at high speed so the car out of control and overturned. Through the proximal causewill be known whether the cause of the accident or the accident is guaranteed in the condition of the insurance policy or not?