Page 65 - Insurance Surveyors Book Ebook IC S01
P. 65
Survey And Loss Assessment IC-S01
Personal and nonpersonal contracts
In a personal contract the insurer implicitly expresses confidence in the
policyholder's integrity and ability to take proper care of the subject matter of
insurance. Fire, motor policies are examples of personal contracts insurance.
Life and marine cargo policies are not considered to be personal contracts
In case of personal contracts consent of insurers is necessary before transferring
the policy.
When a personal contract is transferred to another person by way of assignment
after the consent of the insurer it is said to be a new contract and is termed as
novation.
A proposal form is the document which is filled by the prospective insured to
provide all material information in respect of risk to be covered. After going
through the proposal form the insurer decides whether to accept or reject the
risk and if so then at what terms and conditions.
The proposal form contains questions designed to elicit all material information
about the particular risk proposed for insurance. It also contains the provisions of
section 41 of the Insurance Act according to which payment of any rebate in
premium is prohibited
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