Whatever type of insurance you want to hire, you must sign a contract with the insurance company. There are very important aspects in an insurance contract that you should know.
Here we explain 10 important things that can help you during the validity of your insurance contract:
1. A law that watches over the weakest
Generally, the Law of the Insurance Contract is mandatory, unless otherwise specified in a specific section.
That means that neither party can change its content. Thus, there can be no clauses that go against the law, except if it is to benefit the insured.
The will is to protect the most defenseless party, which is usually the policyholder and / or insured. The Law monitors that large companies can not use the law at their convenience.
Read the contract well and, if in doubt, ask for help from an insurance intermediary.
2. It can not be a free contract
If someone has rarely given you a policy, you should know that it was not entirely real. Precisely, the Insurance Contract Law says that insurance contracts are onerous.
In other words, it can not be free since each of the parties must take responsibility for their economic responsibilities.
The policyholder will have to pay the premium, and the insurance company must compensate the damage occurred.
3. It will work out better with a single payment
Insurance companies provide facilities to their customers to pay the premium.
Before signing the contract you will agree on whether the payment is divided or not. If you are better off paying monthly, quarterly or semiannually, you will have a surcharge for the interests of that fractionation.
Now, if you can pay it once, do it. That way you’ll save a little money. And do not let your mind stop paying any bills because the Law of the Insurance Contract makes it clear that the premium is indivisible.
Sooner or later, it will be your turn to pay it in full.
4. Based on the good faith of the two parties
The legal nature of the Law of the Specific Insurance Contract is based on the good faith of the parties, among other aspects. Both the insurance company and the client must collaborate to comply with the agreement.
For this, among its obligations is that of not missing the truth or misinterpreting the agreed clauses.
5. The limiting clauses must be signed
For a long time there has been a bad habit of not signing the policies and when there is a loss the companies usually ask the policyholder to sign them before proceeding to compensate if it were the case.
In insurance contracts should highlight the limiting clauses of the rights of the insured over the rest. These clauses must be accepted in writing with the signature of the policyholder.
Before signing or accepting the policy, review the limiting clauses of your contract.
6. The Provisional Document of Coverage confirms the contract
If the company has not had time to make the final contract, the Provisional Document of Coverage can serve you.
It is the obligation of the company to deliver this certificate, which is nothing more than a supporting document pending the final.
7. Rights and duties
The insurance company has the duty to indemnify or pay the benefit agreed in the contract if the damage occurs and there has been no bad faith or deceit on the part of the policyholder or insured.
The policyholder has the duty to pay the entire premium. And the insured has the rights that derive from the contract.
Now, policyholder and insured – if they are different people – must provide the precise information so that the insurer can evaluate the risk and coverage in the contract.
If the loss occurs, both the policyholder and the insured must inform the company of this.
8. Beware of the underinsurance
One of the most common reasons for a customer to get angry with his insurer is if he does not compensate him with the amount he wanted.
This is stipulated in the contract. Usually, the insured usually calculates the insured capital downwards, either because he does not know it or because he wants the premium to be cheaper.
Well, it is important to be advised by the broker or the insurance agent and include the correct capital in the policy.
If you put a lower capital of the real value of what you want to insure, if there is a loss the insurance company will only compensate with the proportional part.
Hence the famous proportional rule widely used by companies if the client has not put the capital that it really is.
9. Deadlines stipulated
Like any contract, depending on which situations have very well defined time periods that you should know about. Here we highlight what we think may be of your interest:
- If a loss has occurred: you have 7 days to report it to your insurance broker or the company.
- If you do not want to renew the policy: you must notify it 1 month before the expiration.
- Prescription to claim compensation: in damage insurance you have 2 years and in people insurance, 5 years.
- Delay of the company in the payment of compensation: if more than 3 months pass from the date of the loss, the insured will charge a delay.
Apart from these deadlines, there are many others that according to the situation that you find you should keep in mind. Your insurance broker will inform you.
10. If the premium goes up, the company must notify you
Before the renewal of your policy, if the price of the premium changes with respect to the previous year, the company must notify you 2 months before.
That is whenever the price increases for reasons that are not stipulated in the contract. For example, if it is agreed that each year the premium will rise with the CPI, it would be an agreed increase and it would not have to notify you.
If the insurance company decides to raise the price without an agreed reason and does not notify you, you can terminate the renewal contract without any problem.