To conclude any contract, it is necessary that the final results of the agreement satisfy all interested parties. The insurance interest lies precisely in reaching the required compromise. The insured person simply understands that in the event of an unforeseen situation, the insurer will necessarily pay the agreed financial indemnity. How is the insurance interest in insurance determined and what does the law say about this?
The first explanation of insurance interest
The first theories regarding the coincidence of insurance interests were developed in England. So, Judge Lawrence determines that the insurance interest arises if there are circumstances related to the subject of interest that can change this subject or its characteristics. Insurance is designed to minimize the damage caused by circumstances and provide the affected person with monetary compensation. Thus, if there are no circumstances that may affect the characteristics of the insured item, then there is no insurance interest.
The classical theory of insurance law
This idea is more simply expressed in the classical theory of insurance law, and it belongs to the famous economist Ehrenberg. He calls the insurance interest interrelated relationships, by virtue of which the related party may suffer material loss. There are other definitions, but in general they express the same idea: there is no insurance contract if there is no interest in such an agreement. It follows from this that the interest of insurance companies is that the insured event in relation to the insured good does not occur. For the insured person this interest is not so expressed and boils down to the following:
- if the insured event occurs, he will be paid compensation;
- if the insured event does not occur, he will still have one or another good.
The value of insurance interest
The following explanation of insurance interest is common in insurance law:
- He determines the principle of material protection from unforeseen circumstances.
- Defines all important elements of the occurrence of an insurance obligation. Among them are the insurance object itself, the subject composition, performance and liability of the parties.
To the above, it should be added that it is the insurance interest that determines the maximum amount of compensation that the policyholder can count on.
How it works?
Protection of insurance interests consists in material compensation of risks that the insurance object may face, after which its characteristics will change. For example, car insurance under CASCO obliges the insurance company to indemnify for losses caused to the car as a result of an emergency, natural disaster, traffic accident, theft or complete destruction. Here the insurance interest is, in fact, the car: both parties to the transaction, both the car owner and the insurance company, are interested in its integrity. Circumstances play against them. If circumstances have not changed the characteristics of the car by the end date of the policy, then both sides can breathe quietly. But if the car was stolen or destroyed, then the insurance will protect the interests of the owner of the car, materially compensating him for the loss of the car.
Insurers and crooks
Unfortunately, the interests of owners and insurers do not always coincide at the stage of signing the policy. Numerous cases of insurance fraud are forcing insurers to look for other options for doing business. For example, a recent scandal with insurance companies over the refusal to sell CTP insurance was caused by the actions of auto lawyers who worked with scammers. Arranging fake accidents, they pumped out so much money from insurance companies through the court that they even stopped work in certain areas of Russia. It took a series of federal events to reduce the losses incurred by insurance companies. Therefore, do not be surprised that insurers try to protect their interests as much as possible and for this they use all the acceptable techniques.
Insurer's Tricks
When applying to the insurance company (IC) for legal payment, the policy holder often encounters numerous tricks of the lawyers of the insurance company. The classic cases of incorrect (to put it mildly) behavior of SC representatives are:
- Proposal to sign consent for compensation without examination. Having received 1/10 of the requested amount, the victim goes to court, where he is shown his own consent. The court, accordingly, refuses to consider the case.
- The proposal to inspect damaged property from experts of the UK. As a rule, "lured" experts give a very underestimated amount of damage. By signing the examination certificate, the victim automatically agrees to the miniscule amount allocated by the insurance company. The court will be forced to refuse to satisfy the claim, as previously the victim agreed with the preliminary amount of the damage caused. He confirmed his consent with a signature.
- The original accident notice is taken from the victim in an accident without making a copy. The original is lost, and the victim cannot receive compensation due to the lack of this document.
- Having filed a statement about an accident, the victim waited several months for payment. During this time, he repaired the car. He was denied payment, as representatives of the UK considered the excuse for seeking compensation far-fetched. Photos from the scene of a road transport adventure, a damaged car and a traffic accident notice were not left with the car owner.
- According to CASCO conditions, the insurer does not compensate for the loss of wheels if other parts of the car were not damaged. If the client does not declare in writing to the police and the insurance company that his car was damaged, the payment under CASCO will be refused.
How to protect your interests
This is only a small part of the tricks that victims have to deal with when contacting an insurance company. If you are confident that you can protect your rights and are ready to spend time and money on this, feel free to fight. The rest are strongly encouraged to seek help from a law firm and instruct professionals to represent the interests in insurance.
Lawyers and insurance companies
Representation in an insurance company has long turned into a special kind of business. As a rule, the victim does not play any role here - the main actors are the representatives of the victim (auto lawyers) and the insurer's agents. Representation in an insurance company is a specialty of many law firms. Both parties thoroughly know insurance legislation and are able to fight on equal terms in the courtroom.
Lawyers are able to conduct the correct procedural actions, organize an independent examination and defend the insurance interest of the car owner in court. The cost of a professional’s services is fully compensated by money borrowed from an insurance company. For lawyers to accept the conduct of the case, a power of attorney should be issued. The interests of the insurance company will protect itself, well, and the victim should be sure that with the help of a lawyer he will definitely receive the money due to him.