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Legal Needs [This Network is not currently active and cannot accept new posts] | | Topics
Insurance LawViews: 123
Nov 26, 2008 4:55 pm re: re: Insurance Law

Ritu
''Strictly speaking, 'No'. When one opts for an insurance policy one is paying (premium) to insure one's life, health or possession against unforeseen events like death, illness, accidents, damage, etc. The payment is for the act of insuring.

Premiums are usually not refundable, irrespective of whether the insurance is availed or not. Premiums are in a way akin to a one-way street.

In fact, collecting premiums from many more helps the insurance companies pay the insurance amount to the few unfortunate ones - in whose case the insured event takes place."

~ I disagree..if one pays premium n doesn't die then of course premium ain't refundable...but thats not the same as paying the premium for travel n cancelling the travel plans....in the later case premium SHOULD be refundable 'cos:

its a case of void contract(loosely translated void = one which need not be performed)...i.e. a contract that is valid at the time of formation but subsequetly becomes void due to certain reasons like for example X promises to sell a car to Y & the car is subsequently destroyed in an accident before the sale is complete...the contract between X & Y becomes void & need not be performed...when the contract becomes void the principle of restitution i.e. restoration of money transfer that happened between the parties becomes apllicable...i.e. in the above case while Y can't sue X for breach of contract, X has to return any advance payment that Y might have made to X. One of the circumstances when the contract becomes void is--if the contract is based on the presumption of happening of a certain event the contract becomes void when the said event is no longer going to take place ( I remember there was a case in my law book which ran somewhat like this--X had hired a room to watch the king's procession..the procession was subsequently cancelled. It was held that contract of renting became void cos it was based on the assumption of procession)...translated to the situation in the present thread ......

the contract of insurance was based on the presumption of travel...& if travel is cancelled, the insurance becomes a void contract & hence it would stand cancelled & restitution becomes applicable & hence premium should be refunded.

Of course companies are known to do lotsa unreasonable things hiding behind fine print & corporate policies but I think this position can be challenged in courts as being unreasonable & against the basic priciples of Law.



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