a MARINE
INSURANCE
Marine insurance
is the contract under which the insurer or underwriter undertakes to the marine
against the losses incidental to marine adventure. Marine insurance is really
transportation insurance .Marine insurance may be defined as the form of
insurance covering loss or damage to
verses or to cargo or
passengers during transportation on the
high sea..
Marine
insurance covers both land risk (inland marine) and Sea risk(ocean marine)
Ocean marine insurance
covers losses that
occurs on the high seas, such as loss of the vessel, loss of the
cargo, and any other legal
liabilities that may arise as a result of such a calamity.
Inland marine
insurance covers the hazards involved in
shipping goods by rail, truck, airplane,
steamer or barge
Ocean marine is further divided into
·
Cargo
insurance
·
Hull
insurance
·
Freight
insurance
All the
mentioned has an insurable interest to the person who takes or hold the policy.
The following has the insurable
interest to the marine insurance
Generally
marine insurance contract property interest
I.
The
vessel or hull –
This is interested by the ship owner to insure ship itself against loss or damage resulting from
five storm collision with other vessel or rock and sinking .
II.
The
cargo-This is
when the cargo (goods or merchandised) carried by the ship is insured in ships
.This covers risk resulted from sinking a fire “all risk “and normally this is done by a Trader or the
owner at the cargo or goods.
III.
Freight
insurance
This
is the cost of transport the goods .This may be insured in several different
ways .If the freight revenue is
contingent upon safe delivery of goods ,the carrier insures the freight as part
of regular hull coverage
ALSO
IV.
A
creditor who has advanced money on such a ship as cargo has an insurable
interest to the extent of his claim
V.
The
master and the crew of the ship have in respect of their wage
Other
principles applied to marine insurance involves:
a) Utmost good faith
b) Indemnity principles
Marine
insurance policy contains the term and conditions under which the marine
insurance is issued.
The policy
contain the following information;
-
The
particulars about the property,
-
risks or hazard covered
-
the
amount of insurance premium
-
the
period ,
-
the
rate of premium etc.
PERILS OF THE SEA
The risk
insured are commonly known as perils of the sea .example
-Storm,
rocks, collision of ships ,BURNING OF
SHIPS,SINKING OF the ship, spoilage of cargo from sea water, privacy.
SIGNIFICANT
OF MARINE INSURANCE
- Marine insurance facilitate international
trade since Bulky at goods in the world are transported by the ship
-It is the
traders shield against perils at seas as they are compensated on the
destruction of the ship or
cargo
KINDS OF MARINE INSURANCE
To congregate the changeable demand of the insured persons, different
kinds of marine insurance are issued. These policies are
·
Valued
policy
·
Open-or
invaluable policy
·
Voyage
policy
·
Time
policy
·
Mixed
policy
·
Floating
policy
·
fleet
policy
·
Wager
policy
1.
VALUED POLICY
This is the
one under which the value of the subject- matter is insured is specified on the
face of the policy itself. Thus the amount to be paid in the event of total
loss agreed upon between the insurer and the insured at the time of insurance
only , and therefore there is no need of partial loss
The value which is agreed upon is
called the insured value .If forms
the measure of indemnity in the event of loss. Insured value is not necessary
the actual value .It include the following items
I.
Invoice
cost of the goods
II.
Freight,
insurance and other charges
III.
10%(
the percentage will vary as per the agreement)margin to cover expected profit
and other incidental expenses
Valued
policy is very useful for insuring cargo the values of which often change
during voyage on account of market fluctuations
2.
OPEN OR UNVALUED POLICY
It is a
policy under which the value of the subject matter insured is not agreed upon
at time of affecting insurance but has to be ascertained whenever property
insured is lost or demanded
3.
VOYAGE POLICY
It is a
policy which cover the subject matter for the duration of particular voyage ,no
matter how long time it may take. Under such policy the contract is to ensure
the subject matter from one part to another.
In such a
policy the port of departure and the port of destination serve as the basis to
determine the risk covered .
Usually
cargoes which are exposed to the perils of the sea during transportation re insured
under the voyage policy
4.
TIME POLICY
It is one
under which the insurance is effected for a specified period of time, usually
not exceeding twelve months. Time policy is generally used in connection with
the insurance of ship.
Such
policies generally contains a clause starting that “ if the voyage is not
completed before expiry of the period mentioned in the policy , the subject
matter of the insurance shall be covered by the policy until the voyage is
completed or a period not exceeding one month.
5.
MIXED POLICY
Is the
policy which cover the risk for both a specific voyages and for a period of
time.
It may be
defined as a policy covering a vessel during all its voyages from one
named port to another named port during a specified period.
Thus it is a
mixture of time and voyage policy.
6.
FLOATING POLICY.
This covers
losses on particular route for a specific period. It is the one under which
subject matter of insurance is describe in general terms without specifying the ship or
ships or other particulars.
Floating
policy is generally used by merchants who regularly dispatch or receive goods
to be shipped within a stipulated period by one policy.
One policy
for a round sum is taken out in which it is stated that, the contract is to
cover the goods or merchandise to deterred from time after the date of the
contract.
Whenever
goods are dispatch, the insured makes ’’declaration in declaration form “giving
full particulars about the shipment.
On receiving
these delegation, The insurer reduces the total sum of the policy by the amount
that premium the policy by the amount of premium the policy remain open till
the sum of the policy is completely exhausted as a result of such reduction at
the time of each declaration.
When it is
exhausted the policy is taken as fully declared or run off and the sum of the
policy is closed.
It means
that any additional shipment by the insured will not be covered by that policy
.New policy will have to be taken to cover it.
Floating
Policy is also known as OPEN or Declaration policy
7.
Fleet policy
By which
several vessels belonging to one owner are insured under the same policy
8. WAGER POLICY
This is the
policy held by a person who has no legitimate insurable interest in subject
matter at the insurance and this in effect is simply betting with the insurer
that he will suffer a loss
Because of
their possible gambling nature, such policies are not enforceable at law but
they are not illegal provided the interest exist and continue to be .
Such
policies are sometimes termed PPI POLICIES (POLICY IS PROOF OF INTEREST)
( mugal v2 page 186)
STAGES IN AQUIRING
MARINE INSURANCE POLICY
Introduction
The method adopted in effecting a contract of marine insurance differs from that of fire, life and accident. In marine business is almost invariably placed through a broker, who on receipt of instructions from the principle, make out an abbreviated memorandum of the risk which is termed an original slip.
The method adopted in effecting a contract of marine insurance differs from that of fire, life and accident. In marine business is almost invariably placed through a broker, who on receipt of instructions from the principle, make out an abbreviated memorandum of the risk which is termed an original slip.
If you are looking for a marine
insurance policy, here are the steps that you need to take=
- Choose
between Broker or Insurance Company = After choosing a suitable marine insurance
policy, it is essential to decide to whom you should approach for the
policy. As the world of corporate insurance is tricky, it is always good
to take the help of corporate insurance advisors to ease your work. The
broker, who possesses, specialized knowledge about various insurance
policies would provide you all the important information to take out a
marine insurance policy without delay. The broker would not only help in
buying a marine insurance policy but would also help in case of claim
settlement.
- Choose
the Marine Insurance Company=
There are various insurance companies in Tanzania , including both
government and private, which are offering marine insurance Choosing the one insurer is essential.
- Fill
Marine Declaration Form=
Usually, a proposal form is required to be submitted to the marine
insurance company to initiate the process. In case of marine insurance,
you would have to submit a marine declaration or requisition form.
This form requires the proposer to
submit all the details about the risk, like the items to be shipped, the name
of the policyholder, value of goods, name of the carrying vessel, a place where
the claim takes place, etc. If you are taking the help of insurance advisor,
you can submit your form to him who would clearly review your form to ensure it
is in order. After that, it would pass on the form to the marine insurance
company. Here, you can note that your marine insurance coverage should include
your cost of goods along with shipping expenses, plus, 10% or 15% added for
anticipated profits.
- Assessment
of Risks= Once
the marine declaration form is received by the insurer, their officials
would evaluate the risks. The risk insured must be present in the
condition as stated in the declaration form. The officials after
ascertaining the risk involved would decide the premium which would
require being paid by the insurer along with the stamp fee.
- Payment
of Premium=
Once the insurer submits the declaration form, the proposer is asked to
pay the insurance premium as fixed by the marine insurance company. Here,
the premium that needs to be paid should be either in cash or cheque. You
can adopt any other mode of payment as decided by the insurer
- Issuance
of Cover Note = Once the premium is paid, the
marine insurance company would issue a cover note, which would be subject
to the condition as stated by the insurer in the policy document. The
cover consists of details like name of the marine insurance company, sum
insured, the name of the policyholder, name of the vessel, ports of
destination and departure, premium rate, etc.
- Issuance
of Marine Insurance Policy=
Finally, the insurer would prepare and issue marine insurance policy which
would have complete details about your policy. The same would be handed
over to you.
TERMS/CLAUSE OF MARINE INSUARNCY
POLICY
Many of the
terms in the policy have importance legal significance some of the terms are as
follows
1.
LOST OR NOT LOST
A clause used in
ocean marine insurance which states that the insurer will pay
even if the loss insured against has occurred prior to the effecting of the insurance.
The company would, of course, not be liable if the
policyholder knew that the loss had occurred when ordering the insurance.
This applies to cases where at the
time the insurance is taken out neither of the parties is taken out neither of
the parties knows whether a ship already on its voyages is still in existence
and safe.
2.
AT AND FROM
‘At’ and ‘From’
Clause= It signifies
to the time when the risk would start. As per the clause, the risk cover would
start when the ship is there at the port for the departure and from the time it
leaves the port.
Where a
marine policy insures a ship at and from a particular place and the ship is at
that place and the ship is at that place in good safety when the contract is
concluded, the risk attaches when the contract is concluded.
Where the
marine policy insures chartered freight
at and from a particular place and the ship is not at that place .when the
contract is concluded, the risk attaches when the ship arrives there in good
safety and unless the policy otherwise provides ,It is immaterial that the ship
is insured by another marine policy for a specified time after arrival.
Summary
If the ship
is already lying at the given part in a good safety, The risk is covered
immediately, The policy is concluded.
If she is
not already there the risk is covered as soon as she arrives
3.
TOUCH AND STAY
Touch and
Stay Clause= As per the clause; the ship should go and stay only at those
points which are clearly mentioned in the marine insurance policy. In case the
ports are not mentioned in the policy document, the ship must take the
customary route and stay at the port which comes on that route In case the ship
goes to any other port, it will be termed as the deviation.
This term
authorizes the insured ship to call at a certain specified port in the course
of voyage.
It means
that the clause permits the ship to touch and stay at such port and such order
as mentis in the policy. It means that the clause permits the ship to touch and
stay at such port and in such order as mentions in the policy.
If nothing specific in this respect
is mentioned in the policy the ship must touch and stay at port which are
usually called at in that particular trade route. Any departure from the
route mentioned in the policy or the ordinary route followed in the
trade will be considered as deviation.
4.
PERIL OF THE SEAS
The term
refers only to fortuitous accident or casualties at sea , including
negligent navigation by the insured or his servants ( captain and crew) it does
not cover the action of the wind or
waves unless it is of an usually violet
nature and excluded perils as defined by section 55, marine insurance act 1906.
5.
“JETTISONS”
jettison= It means throwing off certain cargo from the
ship and lighten the load during an emergency. It is necessary to do this in
order to avoid any marine peril to happen.
It is covered only emergency Except by agreement or custom of the trade,
deck cargo is not included in the cover.
6.
“BARRATRY”
Includes
every wrongful act committed by master or crew where by the interest of the
ship owner character are prejudiced example
setting fire to the ship.
7.
CONFESSING OURSELVES PAID
These words
refers to the customers by which the
insured is liable to the broker and not to the under – writer/ insurer for
payment of premium.
8.
Valuation clause
This
clause states that insured value of the good as agreed
upon between the insured and the insure, in case of a valued policy. In case
of un valued policy blank space is left after the word “ and shall be valued at ……….”
9. Sue and labor clause
This
clause is inserted in marine policies to offer an inducement to the
insured to take all possible steps to
offer an inducement to the insured to take all possible steps to avert or
minimize a loss. By this clause the insured is given power to take all such steps to protect the subject matter insured
or minimizes the loss as he would have
taken in case of his own property
not covered by any insurance policy.
Expenses incurred by the insured
for this purpose, if any are paid to
protect the subject matter insured or minimizes the loss as he would have taken
in case of his own property not covered by any insurance policy. Expenses incurred by the insured for this purpose, if any are
paid by the insurer.
10. Waiver clause
This clause is supplement to the sue and labour clause.
It states that any act of insured or the
insurer to protect the subject
matter of insurance shall not be taken
to mean that the insurer
accepts the act of the insured as abandonment of the policy. It
covers both the insurer and the insured who declare an agreement between
them that “ no act of the insured
or insurer in recovering, saving
or preserving the property insured shall
be considered as a waiver or acceptance of abandonment.
11. Warehouse to warehouse clause.
This clause is
inserted in a marine policy if the risks
of goods are to be covered from the time of their dispatch from the insured s
warehouse and their delivery at the warehouse in the port of destination.
12. Premium clause .
The
receipt and the rate of premium is stated in this clause . a contract of marine
insurance ,like any business contract ,to be valid ,must be based on the
payment of premium to the insurer or the underwriter who agrees to indemnify
the insured against loss by the perils insured against .acknowledgment of the
premium under a clause of the policy is a conclusive evidence of the contract
between the insured and the insure
13. Memorandum
clause .
There are many highly
perishable items which form the subject –matter of marine insurance .the
memorandum clause is inserted in the policy with express purpose of exonerating
the insurer in case of small losses and to prevent disputes over trifling
matters in connection with some of these
perishable articles . in the memorandum
clause following points are stated:
a) in case of goods of most perishable
nature such as corn ,fish ,salt, flour ,and seed the insurer will not be liable
for partial loss
b)in case of the loss of
perishable articles such as sugar ,tobacco ,hides and skins, hemp, etc the insurer will be liable for partial loss
only when the loss or damage is 5 percent or more of the value of the articles
lost or damaged
c) in case of other goods ,and ship and freight
,the insurer will be liable for partial losses only when the loss or damage
amount to 3 percent or more of the value
of the thing lost or damage .
however ,in all these
cases ,the insurer will be liable if there is general average loss or the
ship is stranded.
WARRANTS
Warrant is
the stipulations or term the breach of which entitles the insurer to avoid the
policy altogether. Warrant may be,
(a)express
warrant
(b)Implied
warrant.
(A) EXPRESS WARRANT
Express
warrant are those terms which appear clearly on the face of the policy. The
most common express warrant in marine insurance contact are as follows;
i.
The
time of the sailing of the ship
ii.
The
safety of the ship at particular time
iii.
The
limit of the ship navigation
-
Locality
-
Certain
of year
iv.
Departure
with convoy
This is given only during
hostilities. It means that the ship has to complete the voyage under escort of an a naval force commanded by
a captain appointed by the government.
v.
The
neutrality of the property . It is given only in case of a war time adventure.
It should be noted that
an express warranty does not exclude an implied warranty unless it is country
to the express warranty.
(B) IMPLIED WARRANTIES
These are
certain warranties which are implied in every contract of marine insurance
unless they are expressly excluded.
These implied warranties are not mentioned in the policy. But they are taken by
the parties to be present and are as fully binding on them as the express
warranties.
The
following are implied warranties in a marine insurance contract:-
i.
Sea
– worthiness
ii.
Non
– Deviation
iii.
Legality
of the Voyage.
iv.
Proper
documentation of the ship
(i)
Sea
– Worthiness
It implies that the ship
must be safe enough that not overloaded or linking, that the ship is every
respect fit for the voyage on which it is sailing. In this warrant, it suggest
that the ship must be fully equipped, provisioned and capable of facing
the normal strains and stress of the
voyage on which she is to sail.
(ii)
Non
– Deviation:
In case of the voyage or
mixed policy , there is an implied warranty
that , the ship will not deviate
from the proper cause of the voyage.
By Deviation is meant any
departure by the ship from the route prescribed or from the ordinary trade
route.
In case of any deviation,
The insurer is freed from the liability from the time of the deviation. Even if
the accident occurs after the ship has returned
(After deviation from the normal route) to her normal route the insurer
will not be liable.
Nevertheless, Insurer will remain liable for
losses which have occurred before such deviation
Deviation is permitted or justified under the following
circumstances:-
a. When it is caused by circumstances
beyond the control of the captain of the ship
b. When it is necessary in order to
company with an express or implied
arrantly.
c. When
it is necessary for the safety of the ship or the subject matter
insured.
d. Where deviation is made with a view
to save life or help a ship in distress where in human life will be in danger.
e. Where it is necessary for the purpose
of obtaining medical or surgical aid for any person on board.
f.
When
it is permitted by the policy itself
g. When it is made to avoid capture or
destruction by the enemy of the government.
h. When it is caused by the barratry of
the master or crew (if the barratry is one of the perils insured against)
(iii)
The
legality of the Voyage
This implied warranty of
marine insurance is concerning the requirement of law. It means that the marine insurance
policy cannot be used for the protection
for illegal voyages or ventures. Example
of illegal ventures:-
-
Trading
with the energy
-
Violation
of neutrality laws
-
Breach
of a blockage.
Thus
, there is an implied warranty on the part of the insured
that the voyage is undertaken for legal purpose.
(iv)
Proper
Documentation of the ship.
This is an implied warrant by which ship shall carry all the
proper necessary to prove her neutrality.
CLAUSES
OF MARINE INSURANCY POLICY.
A policy of marine insurance is made
up of various clauses. Some of the more
important clause are :-
MARINE
LOSSESS/MARINE CLAIMS
There are two kinds of
losses which are recognized in marine
insurance. These are:-
-
Total
loss
-
Partial
loss
1.
TOTAL LOSS
Total loss may be either
Actual loss or constructive loss
a. Actual loss
Actual loss occurs when
the subject matter is totally destroyed or becomes irretrievably lost or
damaged. Example , sometimes a vessel leave port and disappear completely.
b. A contractive loss:
This occurs when subject
matter is abandoned because its actual loss appear to be inevitable , or where
the cost of preventing an actual loss
would exceed the value of the property
when repaired. Example where the cost of raising a sunken ship would
exceed her value when recovered.
2.
Partial loss
The term “ partial loss”
in marine insurance is replaced by the term “ AVERAGE” such loses may be either
a particular average loss or a general average loss.
-
A particular Average loss
Is one that is due to
purely accidental cause and therefore coercers only the owner of the affected
property (ship cargo) or his insurer, Example
damage by sea water strong wind, collision or fire not amounting to
total loss.
-
A general average loss.
This is when the cargo has to be jettisoned in order to
secure the safety of the ship and the rest of the cargo
In this case the loss is
born by the ship owner and the owner of the cargo this saved.
General
Average Claims
For general average
claims to be met the following points must be established :-
(i)The loss must result
by deliberate interest
(ii)The action must take
place to protect all parties against
common rise which arise
(iii)It must be an
absolute necessity to incur
(iv)The ship and some
portion of the cargo must have been protected
(v)No defaults took place
by the person whose interest has been sacrificed
Assignment
of marine insurance policy
Marine insurance policies
on goods must of necessity be freely assignable, since goods are frequently
sold, sometimes several times over whilst on the water, and insurable in
consequently passes through several hands before reaching the party ultimately
taking delivery. In the case of cargo policies assignment is by blank
endorsement.
Comparisons between fire insurance and marine
insurance:
Similarity:
-
All fire insurance
contracts are the contracts of
indemnity. Also most of the marine insurance are the contracts of
indemnity except valued policy under
which reasonable percentage of profits is also included in the amount of claim.
-
Both fire and marine
insurance contract are issued for the short period. In case of fire policy,
usually it is for one year, and in marine policy, it is either for voyage
(voyage policy) or for a year time policy
Differences;
-
The moral
responsibility of the insured (cargo-
owner) does not exist in case of marine
insurance. But such responsibilities are
important factor in case of fire policy.
-
Only the actual loss
based on the market value of the property at the time it was destroyed or damaged by fire can be claimed under the fire policy. In case
of marine insurance, Valued policies allow a margin of expected profits as
well.
-
In case of fire policy the insurable interest must exist both
at the beginning of the policy as well
as at the time of the loss. In case of marine insurance it is enough if it
exist at the time the loss occurs.
ACCIDENT INSURANCE.
Accident
insurance is
insurance that provides compensation for accidental injury or death.
Accident
insurance covers
death, dismemberment, loss of sight, loss of income, and medical expenses
caused by accidental injury.
The term
accident insurance originally had particular reference what is known as perusal accident insurance
.most personal accident policies provide for payment of a lump sum in the
invent of death from an accident or loss of sight or limbs and also weekly cash
benefit during temporary or partial disablement .They may also cover
disablement of sidedness.
This type of
insurance does not usually cover negligence act of God or natural disasters and
the policy may include restrictions such as caps on total payout or
restrictions on payout for activities deemed risely.
This type of
policy can be a good idea for people who lack health care coverage insuring
that they will be able to access medical treatment after accident or for people
with families who suspect that their family members could suffer financially if
they died. By purchasing insurance for accidents, people can provide themselves
with more financial security.
Accident
insurance policies have payout which vary depending on the security of the
injuries.
Some include
very specific language about
-Amount which will be paid out in the
event of losing particular extremities, example the payout is designed to cover
medical care along with pain and suffering and if an accident causes permanent
dis-ability
-The payment may be structured to provide
funds for the accident victim to live on.
In the event of death, the benefits are
paid out to the listed beneficially on the policy.
The important information or the accident
insurance include
-Premium rate
-Type of accident
and the event.
Accident
insurance policy also covered not only perusal insurance, it also covers Third
party liability.
Third party
liability
The
liability to a third party crises in connection with most forms of accident
insurance and devotes the liability of the insured to compensate any person who
suffers loss through his negligence of that of his servants or agents in the
course of their duties of sickness.
Types of
accident insurance policy.
The
important types of accident insurance policies in use are
- motor insurance
- General third party.
- Burglary.
- Fidelity
- Personal accident
- sickness
- Engineering
- Bad debt insurance.
1. Motor
insurance :
The
insurance cover loss of damage to the
vehicle or cycle by impact, fire of theft and include third party liability.
This
insurance cover property, The person and liability.
Comprehensive car insurance :-
This
policy includes Third party, Fire and
theft, accidental damage to your car, things stolen from your car, and various other risk.
Conditions
for motor Insurance (AUTOR INSURANCE)
-
Before picking the motor insurance, make
sure that you have a clean driving
record.
-
To be at least 19 years old.
-
To
have license for at least three years.
If
you manage to meet the criterion and
quality then certainly you should proceed ahead to get the motor insurance.
2, Third part liability.
Under the
road traffic acts every meter vehicle driven must be insured for an unlimited
sum against liability for death of or injury to third parties and for the cost
of their medical and surgical treatment. failure to take out third part
insurance cover under these statutes is a criminal offence.
3. Burglary theft and robbery
Burglary
is the act of an authorized entry with criminal interstices into any
building or resident .This policy provides cover against theft and damage to premises arising from
entry .loss of money and stock may be covered this policy.
Robbery.
Is theft
with violence or the threat of violence .burglary insurance covers not only the
property taken but also any damage caused provided that under business policies
fittings fixtures are specifically insured.
4.Fidelity
The main
objective of this form of insurance is
to protect employers against financial
loss by fraud or theft on the part of specific
employees whose duties involves the handling
of cash.
5. Personal Accident and Sickness.
This cover
compensation to cover the cost of Hospital
and other treatment, loss of earnings and depravation of the full use of
all bodies faculties.
There
are four types of policy
a) Personal accident only
b) Personal accidents and all forms of
sickness
c) Accident and illness for a specific
term of years.
6.
Engineering
Policies are
issued covering boilers against explosion steam, gas and oil engines against
Mechanical breakdown, electrical
Machinery against Electrical l and mechanical breakdown etc.
THE KEY INSURANCE
STAKEHOLDERS
Insurance as
the business it has the following stakeholders:
1. Insurance
Agents
2.Insurance
Collectors
3.Insurance
Brokers
4.Actuaries
5.Assessaries
THE ORGANISATIONS
PROVIDING INSURANCE SERVICES
There are
three principal types of Insurance companies:
(a) Proprietary Insurance Companies
(b) Mutual Insurance Companies
(c) State Insurance Companies
INSURANCE AND GAMBLING:
GAMBLING
Gambling is
the betting game in which winners get the prize. It also involves concepts of
larger number
in which one
of them become a winner and get a prize. In the gambling the event speculated must
occurs but which two chances of winning or losing.
In fact Insurance and gambling are not the
same.
Differences Between insurance and
Gambling
1. Insurance intend of serving unlucky persons
who suffer loss by restoring them to the financial position they were before
the loss, one never loss or gain in
insurance.
WHILE
Gambling as the prize, mean to advance the economic position of the winner after winning.
2. In insurance, the event insured may
never happen, WHILE the event speculated must occur to decide the
winner either winning or losing.
3. In insurance there is an insurable
interest in the property one in insuring WHILE
in Gambling there is no insurable interest.
4. Insurance is legal and helpful to society as
it get protection on the payment of
premiums WHILE some gambling is
illegal and may discourage people to
work specially in production activities.
5. Insurance is the security scheme WHILE
Gambling is the financial Game.
(read
other differences in DINA PAGE 213)
Similarities between insurance and
gambling.
-
They
both involves contributions of small amount of money and one person or few
people taking a lot of it.
-
Both
of them apply principles of probability
-
They
both aim at generating profit
-
They
both applies principles
REVIW QUESTIONS.
1.
Explain
seven factors to be considered in
determining the premiums to be paid by the insured.
2.
Identify
four marine loses to be considered when one want to apply for marine
policy
3.
Elaborate five factors considered in
assessing the cost of charging the motor
policy premium.
4.
Explain two types of motor policy
5.
State subrogation principle
6.
Write down five conditions for subrogation
principle