Conditions common to most property and liability insurance policies, both personal and commercial, include:
· Cancellation
· Changes
· Duties of the Insured after a loss
· Assignment
· Subrogation
Cancellation refers to the termination of a policy, by either the insurer or the insured, during the policy period. The cancellation provision states the procedures that must be followed when cancellation is initiated by the insured or by the insurer. Generally, when the policy is cancelled by the insured he shall be eligible for a premium refund on short period basis and when the insurer cancels a policy; he is eligible for a premium on pro-rata basis.
Changes
Many policies contain a policy changes provision that states changes to the policy are valid if the insurer agrees to change in writing.
A liberalization clause, on the contrary, is a policy condition that provides that if a policy form is broadened at no additional premium, the broadened coverage automatically applies to all existing policies of the same type.
Duties of the Insured After a Loss
There are certain duties which the Insured has to follow in the event of a loss. The first and the foremost duty shall involve immediate notification of the claim.
The type of cooperation and the duties required depend on the type of coverage provided. Other duties shall include providing insurer with all the necessary documents such as bills, statement of accounts, etc., and assist insurers in speedy processing of claim.
Assignment
Assignment is the transfer of rights or interest in a policy to another party by the insured. Most policies cannot be assigned without written permission of the insurer.
Insurance Contracts, Loss Exposures and Risk Management
