An insurance is a contractual agreement between the insurer and the insured person in that the insured person will pay an amount to the insurer, regardless of whether the amount paid is a corporeal property, a benefit or a service, and regardless of whether it is paid altogether or in installments, and in return the insurer will pay for the losses that are incurred by the insured person or a third party in the manner that is defined in the contractual agreement.
2870. Insurances are of various types and kinds, such as life insurance, health insurance and property insurance. Since their precepts are the same, there is no need to elaborate upon them.
2871. An insurance is a contract, and is therefore realized upon an offer and an acceptance. For example, the insurer may state, “I undertake the liability of paying for a particular loss of life or property in return for receiving a particular amount,” and the one wishing to be insured responds by stating, “I accept,” or for example, the individual wishing to insure himself states, “I undertake to pay a particular amount in return for coverage on a particular loss,” and the insurer accepts.
This contract, like all other contracts, can be materialized by words or actions. All the other general conditions of contracts are consequential in this contract, such as being b¡ligh and sane, having the intention and not being compelled nor interdicted, be it due to having a feeble mind or due to bankruptcy.
It is also consequential that the insured item, such as life or property, and the potential dangers for which the life or property is being insured against should be specified. Similarly, the payment should also be specified, and if it is paid in installments, the monthly or yearly installments should be specified. The start and end dates of the insurance policy should also be specified.
2872. All forms of insurance policies can be considered as an undertaking by the insurance provider to cover the losses and the insured individual to pay a particular sum (for the insurance). The more precautionary measure is that the insured individual settles the particular amount with the insurance provider with the condition that the insurance provider covers any potential losses. In this case it becomes obligatory upon the insurance provider to cover the losses.
Similarly in the event that the payment by the insured individual is in the form of a corporeal item, he may consider the insurance policy as a gift with the condition that the insurance provider covers any potential losses. In this case it will be obligatory upon the insurance provider to fulfill the condition.
2873. In the event that the insurance policy takes the form of a settlement compromise with the condition of bearing the losses, or a gift with the same condition, and the insurance provider fails to indemnify the insured individual in the event of a loss suffered by him, and hence fails to act upon the condition, the insured individual may employ the option of a breached contract and cancel the settlement compromise or the gift. He may then reclaim the installments that have already been paid.
2874. In the event that the insured party fails to pay the insurance installments according to the agreement, it will not be obligatory upon the insurance provider to cover any losses. In addition the insured party does not reserve the right to reclaim the insurance installments that have already been paid.
2875. A particular duration, such as one year or two years, is not consequential in the validity of an insurance policy, rather, it will be subject to the agreement between the two parties.
2876. If a company is formed by an investment from a number of individuals, and each of the partners or one of them stipulates to the other partners within the partnership agreement that should he incur a loss of life or property owing to an incident, the type of which is specified within the agreement, the company will have to indemnify the individual from its future profits for the losses suffered in the incident. In the event of an incident, it will be obligatory for the company to act according to the condition for as long as the partnership contract is valid.