Explain four requirements of a valid insurance contract.

      

Explain four requirements of a valid insurance contract.

  

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Simon
• Conditional contract. The insurer has the right to refuse to perform if the insured does not satisfy certain conditions contained in the contract. The insured must satisfy all the conditions of the insurance contract.
• Personal contract. The insurance contract is a personal contract. If the owner of the property insured sells it to a new owner, then it is not insured under the contract. Tis reduces the likelihood of moral hazard that could arise if the identity of the insured were not known by the insurer.
• Unilateral contract. This means that the court will enforce the contract in one direction only, against one of the parties.
• Purpose not contrary to public interest.

skilled writter answered the question on May 1, 2018 at 16:13


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