A property insurance contract is concluded on the basis of a written application of the policyholder drawn up in two copies in the prescribed form.
In this case, a separate application is prepared for voluntary insurance of property received by the enterprise under a property lease agreement and accepted from other organizations and citizens.
Property Insurance Application
Similarly, the content of the property insurance application received from other organizations; the difference is only in the table showing the value of the property and the calculation of payments.
In addition, it is further indicated where it is located; book value and insurance are the same. If a property insurance contract is concluded with respect to any part of the property (selective insurance), then an application shall be accompanied by an inventory of the relevant property.
After calculating insurance payments, the first copy of the insurance application remains in the affairs of the insurance company, and the second is returned to the policyholder indicating the amount of insurance payments and the timing of their payment.
Property Insurance Contract
The contract is executed by issuing an insurance policy.
Property insurance contracts can be concluded for one year and for an indefinite period with an annual recalculation of the value of the property and the amount of annual payments.
An agreement concluded for an indefinite period shall be deemed extended for the next year provided that a certain part (usually 20-25%) of insurance payments calculated for the next year is paid before the end of the current year.
With enterprises whose activities are seasonal, when insuring part of the property, as well as property accepted from other organizations and citizens (additional contract), insurance for the duration of experimental or research work, for the time of exhibiting at the exhibition, an insurance contract for a period of not less than a year (short-term contract).
Insurance payments under property insurance contracts concluded for one year and for an indefinite period can be paid both at a time (in the amount of the annual amount of payments), and at different times established in accordance with the general rules.
The contract comes into force from the day after payment of the calculated payments (the whole amount or a certain part). If no payments have been received by the due date, the contract shall be considered invalid.
Termination of insurance contract
At the time of conclusion of the contract, the policyholder must inform the insurance company of all known circumstances that affect the degree of risk.
If the policyholder deliberately violates this circumstance, the insurance company has the right to terminate the contract during the term of the contract within one month from the receipt of information about the risk-raising circumstance.
A notice of termination of the property insurance contract shall be sent to the policyholder in writing.
The property insurance contract is terminated the next day after the notification of the policyholder.
Upon termination of the property insurance contract, a part of the premium proportional to the period from the moment of conclusion of the contract until the termination of the contract remains with the insurance company, the remaining part is returned to the policyholder.
Insurance Indemnity Payments
The insurance company shall be exempted from the payment of compensation if the cause of the insured event was an circumstance unknown to it, which affected the increase in the degree of risk or had a material effect on the volume of obligations to pay compensation.
After applying for insurance, the policyholder has no right to increase the degree of risk or to allow its increase without the consent of the insurance company.
The policyholder must immediately notify the insurance company of all cases of an increase in the degree of risk as soon as he finds out about it, even if the increase does not occur at the insurer’s will.
The main obligations of the insured under property insurance contracts include compliance with legal, official or agreed upon security measures in the insurance contract.
If the policyholder, due to his fault, violates one of the obligations, the insurance company has the right to terminate the contract with the policyholder within one month from the moment of receipt of the news of violation of obligations by the policyholder, having notified the latter in writing, in writing.