CHARACTERISTICS OF AN INSURANCE CONTRACT

Abstract

The insurance institute is a multidisciplinary phenomenon that has economic, legal, mathematical, statistical, but also a broader general meaning. Basically, etymologically, the word insurance means security, trust, protection, provision from unwanted, unfavorable events that the future brings. Insurance contracts are an important instrument for hedging against risks in modern economic and legal systems. The transfer of risk from the insured to the insurer provides economic security and the reduction of the financial consequences of various adverse events.
An insurance contract is an obligation contract, regulated by law, by which one party – the insured, undertakes to pay a premium (insured amount), and the other party – the insurer, undertakes to compensate for damage or to pay a certain amount if an insured event occurs.
The significance of the insurance contract is that, based on the principles of voluntariness, mutuality and solidarity, it provides security to the insured in a material and social sense. With this agreement, the insured overcomes his inability to financially compensate for the damage suffered by receiving appropriate compensation from the insurer. This is particularly important for business entities, where, if an insured event occurs, the payment of the insured amount gives them the opportunity to resume the business and cover the loss Obligatory contracts have three common characteristics. The first is that they create obligations. The second is that they are based on the principles of dispositivity and autonomy of the will of the contracting parties. The third is that they are created by accepting the offer. Obligatory contracts are bilateral legal acts that create obligational relationships. The separate obligation contracts has got characteristics that distinguish it from other contracts and that define its specificity. From the division of contracts into different types made in the theory of contract law, and based of different characteristics, on the one hand, and the definition of the insurance contract in the Law of Obligations on the other hand, we can derive the characteristics of the insurance contract.
The purpose of this paper is to analyze the basic characteristics of an insurance contract and its legal regulation, thereby obtaining a clearer picture of the significance of this contract in everyday life, its place in the legal system, as well as the importance of proper and equitably regulatingf the rights and obligations of the parties in this contractual relationship.