Any six principles of insurance are as follows:

1. Principle of nature of contract

Nature of contract is a fundamental principle of an insurance contract. An insurance contract comes into existence when one party makes a proposal of a contract and the other party accepts the proposal. A contract should be simple to be a valid contract. The person who is entering into a contract should enter with his free consent. 

2. Principle of utmost good faith

An insurance contract is based on the principle of utmost good faith.Under this insurance contract both the parties should have faith over each other. They must behave or act in utmost good faith. It means that they should disclose all material facts or information fully and truly at the time of entering into a contract. 

3. Principle of insurable interest

Under this principle of insurance, the insured must have an interest in the subject matter of the insurance. In the absence of insurable interest, no one can get a property insured and can claim the compensation of loss from the insurance company by destroying property. 

4. Principle of indemnity

The principle of indemnity the insurer makes compensation to the insured against the loss in financial terms. This principle clarifies that the insurance is only for compensation of loss but not for any financial benefits. It means compensation given  to the insured can never be more than the actual loss of the property.

5. Principal of mitigation

According to this principle, it is the duty of the insured to make every effort and to take all possible steps to minimize the loss in the event of an accident. He must do his best to minimize the damage and save the property from damage.

6. Double insurance

Double insurance denotes the insurance of same subject matter with two different companies. It is the same company under two different policies. A double insurance policy is adopted where the financial position of the insurer is doubtful. Here, the insured cannot recover more than the actual loss and cannot claim the whole amount from both the insurers.

 

1. Agreement

The agreement means communication by the parties with one another. There must be an offer and acceptance of the terms and conditions of the insurance contract. The acceptance or rejection of an offer is made by the insurer. The insurance contract becomes valid after the issuance of acceptance notice by the insurer to the insured.

2. Free consent

The parties involved in a contract are said to consent freely when they agree upon the same thing in same sense. There must be free consent between the two parties in the contract. The consent is free when the contract is not made by coercion, undue influence, fraud oor misrepresentation or mistake. 

3. Competents to contract

The parties to the contract should be competent to enter into contracts. Every person is competent to contract who is of the age of majority according to the law and who is of sound mind and is not disqualified from by any law. The insurer must also be legally competent. The insurer must have license to sell the insurance contract.

4. Increase self-respect

There is the direct connection between self-respect and independence of a person in the society. Insurance supports to the person to be independent. It provides economic support to an individual, businessman which helps to increase the self-respect of the person in the society.

5. Legal consideration

In every contract, there should be a legal consideration. In insurance contract, payment of premium is taken as a valid consideration. Without payment of premium, the insurance contract cannot be initiated.

The essential elements of insurance are listed below:

1. Agreement

The agreement means communication by the parties with one another. There must be an offer and acceptance of the terms and conditions of the insurance contract. The acceptance or rejection of an offer is made by the insurer. The insurance contract becomes valid after the issuance of acceptance notice by the insurer to the insured.

2. Free consent

The parties involved in a contract are said to consent freely when they agree upon the same thing in same sense. There must be free consent between the two parties in the contract. The consent is free when the contract is not made by coercion, undue influence, fraud oor misrepresentation or mistake. 

3. Competents to contract

The parties to the contract should be competent to enter into contracts. Every person is competent to contract who is of the age of majority according to the law and who is of sound mind and is not disqualified from by any law. The insurer must also be legally competent. The insurer must have license to sell the insurance contract.

4. Increase self-respect

There is the direct connection between self-respect and independence of a person in the society. Insurance supports to the person to be independent. It provides economic support to an individual, businessman which helps to increase the self-respect of the person in the society.

5. Legal consideration

In every contract, there should be a legal consideration. In an insurance contract, payment of premium is taken as a valid consideration. Without payment of premium, the insurance contract cannot be initiated.

6. Compliance with legal formalities

In the contract of insurance, the agreement between parties must be in written form and signed by both the parties. It must be properly tested by the witness and registered otherwise, it may not be enforced by the court.

 

7. Certainty

The terms and conditions of a contract should be clear and certain. They should be clearly understood by both the parties. In insurance, the insurance company gives printed policy deocument which contains all the trms and conditions of the policy.

8. Insurable interest

Insurable interest refers that the insured must suffer if the loss takes place in the property. Incase of the property interest, ownership of property can support to insurable interest but in the case of life insurance, close family ties or marriage will satisfy the requirement of insurable interest.

9. Encourage saving

The insurance should pay the amount of premium regularly and compulsorily. It develops the habit of saving. The deposited insurance premium cannot be withdrawn like a blank deposit. Life insurance is the best method of saving an investment. It is a good meant to make provision for retirement age.

10. Writing and registration

The insurance contract must be in writing and duly signed, stamped and registered. The condition is fulfilled as the proposer signs in a printed proposal form. The insurance compnay issues the policy document properly signde and stammped.

 

The principles of insurance are listed below:

1. Principle of nature of contract

Nature of contract is a fundamental principle of an insurance contract. An insurance contract comes into existence when one party makes a proposal of a contract and the other party accepts the proposal. A contract should be simple to be a valid contract. The person who is entering into a contract should enter with his free consent. 

2. Principle of utmost good faith

An insurance contract is based on the principle of utmost good faith.Under this insurance contract both the parties should have faith over each other. They must behave or act in utmost good faith. It means that they should disclose all material facts or information fully and truly at the time of entering into a contract. 

3. Principle of insurable interest

Under this principle of insurance, the insured must have an interest in the subject matter of the insurance. In the absence of insurable interest, no one can get a property insured and can claim the compensation of loss from the insurance company by destroying property. 

4. Principle of indemnity

The principle of indemnity the insurer makes compensation to the insured against the loss in financial terms. This principle clarifies that the insurance is only for compensation of loss but not for any financial benefits. It means compensation given  to the insured can never be more than the actual loss of the property.

5. Principal of mitigation

According to this principle, it is the duty of the insured to make every effort and to take all possible steps to minimize the loss in the event of an accident. He must do his best to minimize the damage and save the property from damage.

6. Double insurance

Double insurance denotes the insurance of same subject matter with two different companies. It is the same company under two different policies. A double insurance policy is adopted where the financial position of the insurer is doubtful. Here, the insured cannot recover more than the actual loss and cannot claim the whole amount from both the insurers.

7. Principle of proximate cause

The Proximate cause literally means the ‘nearest cause’ or ‘direct cause’. This principle states that if the loss is caused by two or more than two reasons, then it becomes necessary to identify the nearest cause of the loss. The insurance company is not liable to compensate the loss caused by remote cause.

8. Principle of subrogation

This principle of subrogation strongly supports the principle of indemnity. Subrogation is the right of the subject matter of insurance gets to be transferred from insured to the insurance company after indemnity.

9. Principle of contribution

The principle of Contribution allows insurance companies to share the cost of claims and prevents an insured from collecting in full on more than one policy. This principle exists when the insured can insure the same property within more than one insurance company. It states that if a person takes insurance policy from more than one insurance company for a single property than the insured will be paid the actual loss by these insurance companies in the ratio of the value of policy issued by them.