Page 25 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

Contribution: The principle of Contribution is a corollary
of the basic principle of indemnity. It is applicable in
contracts of insurance to determine the liability of an
insurance company where the subject matter is insured
with two or more insurers.

In motor insurance contribution arises when the same
vehicle is insured under more than one policy.
According to policy condition the loss is shared pro-
rata between the insurers. In case the sum is different,
the liability is divided in the ratio of sum insured.

Contribution arises when there is double insurance, that
is, when the same vehicle is insured under two policies.
According to policy condition the loss is shared pro-
rata between the two insurers.

Proximate Cause: Liability of insurer arises only in
case the loss or damage was proximately caused by a
insured peril and as such the insurer will not be liable if
the same was caused by the remote causes and the
remote consequences even though they relate to the
insured peril.

Proximate cause means the active, efficient motion that
sets in motion a train of events, which brings about a
result, without the intervention of any force started and

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