The insurance contract

The present research work seeks to make a complete analysis of the insurance contract, since currently there is very little updated bibliography on the subject.

First we must understand that the insurance contract is one through which a person called an insurer is obliged, in exchange for a sum of money, known as a premium, to indemnify another insured call or the person it designates, of a loss or damage that may be caused by an uncertain event.

From this concept we can establish which are the subjects that intervene in the insurance contract, which are: the insurer, the insured - policyholder and the beneficiary.

It is also worth mentioning some of the main characteristics of the insurance contract: it is consensual, bilateral and random. It is consensual because it is perfected by the mere consent of the parties and has produced its effects since the convention has been held; It is bilateral since it originates reciprocal rights and obligations between the insurer and the insured, and it is random because it refers to compensation for a loss or damage caused by an uncertain event or event, since it is not known if it will occur and in the opposite case - as it happens with the death - it is not known when it will have to happen.

Throughout the research work, other topics that are relevant to understanding the insurance contract are also touched upon, such as the elements of the insurance contract that are: the insurable interest, the insurable risk, the premium and the obligation to indemnify.

It also seeks to make a correct classification of insurance contracts and not only limit ourselves to those indicated in the Commercial Code, it also addresses important topics such as reinsurance, coinsurance, multiple insurance, underinsurance and overinsurance.

Finally we have that the insurance contract necessarily gives rise to a policy, which is the evidentiary instrument par excellence of the contract concluded between the insured and the insurer, it reflects the rules that generally, particularly or specially regulate the agreed contractual relationship..

I.- Historical Framework:

1. Origin of the Insurance Contract

The history of the Insurance goes back to the ancient civilizations where practices that constituted the beginnings of our current Insurance system were used. Probably the oldest forms of Insurance were started by the Babylonians and the Hindus. These first contracts were known under the name Contracts a la Gruesa and were carried out, essentially, between the bankers and the owners of the ships. Frequently, the owner of a ship would borrow the funds necessary to purchase cargo and finance a trip.

The Loan to the Gross contract specified that if the ship or cargo was lost during the trip, the loan would be understood as canceled. Naturally, the cost of this contract was very high; however, if the banker financed owners whose losses were greater than expected, he could lose money.

The vestiges of Life Insurance are found in ancient civilizations, such as Rome, where it was customary for religious associations to collect and distribute funds among its members in the event of the death of one of them.

With the growth of trade during the Middle Ages in both Europe and the Near East, it became necessary to guarantee financial solvency in the event of a shipping disaster. Eventually, England turned out to be the world's maritime center, and London became the insurance capital for hull and cargo. Fire Insurance emerged later in the 17th century, after a fire destroyed most of London.

After that event many plans were formulated, but most failed again because they were not adequate reserves to deal with the subsequent losses of the major conflagrations that occurred.

The companies with an insurance purpose appeared around 1,720, and in the initial stages speculators and promoters caused the financial failure of most of these new companies.

Eventually the repercussions were so serious that Parliament restricted licenses in such a way that there were only two licensed companies. These are still major Insurance companies in England such as Lloyd's of London.

II.- Theoretical Framework:

2. Concept of Insurance Contract

It is important to mention that neither the Commercial Code, nor the General Law of the Financial and Insurance System (Law 26702) define the insurance contract, which is why it is necessary to resort to doctrine to find a uniform and precise definition of what it is truly the insurance contract.

Professor Montoya Mandredi's concept is as follows: “…. a contract by which a person (insurer) undertakes, in exchange for a sum of money (premium), to indemnify another (insured), satisfy a need of this or deliver to a third party (beneficiary) within the agreed conditions, the amounts agreed to compensate for the consequences of an uncertain event, at least in terms of time (risk) ".

In Bruck's opinion, quoted by Isaac Halperin, it is: “… an onerous contract by which one party (insurer) spontaneously (selbstanding) assumes a risk and therefore covers an eventual need of the other party (policyholder) for the event of a certain fact, or that is obligated for a certain moment to an appreciable benefit in money, for a certain or determinable amount, and in which the obligation, at least of one of the parties, depends on unknown circumstances in its gravity or occurrence ”.

For Donati, it is: "… can be defined as that business in which the insurer, against payment or obligation to pay a premium, is obliged to compensate the insured for the consequences of the uncertain harmful event, within the agreed limits."

Vivante, affirms that it is: “… the contract by which a company, constituted for the exercise of these businesses, assumes the external risks by means of a premium set in advance. For him, the requirement of the company is essential; the pre-set premium distinguishes it from mutual insurance; it eliminates the forecast ”.

In this regard, Fernández points out that it is: “..a contract by which one of the parties agrees, by paying the other a premium or contribution, to pay the latter or a third party, a certain amount if a risk occurs determined".

In Garrigues' opinion, the insurance contract “… is a substantive and burdensome contract by which a person - the insurer - assumes the risk of an uncertain event occurring, at least in terms of time, forcing himself to make a pecuniary benefit when the risk has become sinister ”.

A commercial concept is given by the Insurance Company SANTANDER CENTRAL HISPANO, which defines it as follows: ”By the Insurance contract, the Insurer (Insurance Company), upon receiving a premium as payment, is obligated in front of the Insured to indemnify you as agreed, if the expected event becomes. All this must be clearly established between the Insured and the Insurance Company in a policy or contract. ”

After having analyzed the different definitions that the authors give on the subject, it is necessary to propose an own concept, which is the following: The insurance contract is that contract by which a person called an insurer is obligated, in exchange for a sum of money, known as a premium, to indemnify another insured call or the person designated by it, beneficiary, for a loss or damage that an uncertain event may cause. In such a way that the sum object of compensation, which was expressly agreed, is paid when the event or risk covered by the insurance occurs.

3. Features:

The insurance contract has the following characteristics:

It is an act of commerce.- Indeed, the insurance contract constitutes a commercial contract, regulated in the Commercial Code and in other aspects, supplementally by civil legislation.It is a solemn contract.- The insurance contract is solemn, since its improvement occurs from the moment the insurer signs the policy, the insurer's signature serves to solemnize the prior agreement of wills between the contracting parties, regarding the elements of the insurance. It is a bilateral contract. - Because it generates rights and obligations for each of the contracting subjects, Garrigues points out in this regard: "… the policyholder is obliged to pay the premium and the insurer is obligated to a pecuniary benefit: although this benefit is subordinated to an uncertain event, which is the realization of the loss ”.It is an onerous contract.- It is onerous, because it means a corresponding enrichment and impoverishment for the parties. "As for the policyholder, the obligation to pay the premium is imposed and the insurer assumes the risk derived from the provision of the payment of the compensation from which he is released if the premium has not been paid before the loss" It is a random contract.- It is random because both the insured and the insurer are subject to a contingency that may represent a profit for one and a loss for the other. Such contingency consists in the possibility of the loss occurring. In this regard Professor Montoya says:"The random nature of the contract does not disappear due to the fact that the insurance companies have statistical tables that allow them to determine the cost of the risks, based on which they set the amount of the premiums… In other words, although the insurance activity itself is less and less risky as the means to determine the frequency of risks are improved, the contract continues to be random in the case of each isolated contract and with respect to the insured. "It is a contract for continued execution.- Because the rights of the parties or the duties assigned to them are developed continuously, from the conclusion of the contract to its completion for any reason.It is a contract of adherence.- Insurance is not a contract of free discussion but of adhesion.The clauses are established by the insurer, the insured being unable to discuss their content, they can only accept or reject the contract imposed by the insurer. You can only choose the additional clauses offered by the insurer, but in no way may the content of the contract vary. But all this will depend on the will and flexibility of each insurance company.

4. Elements:

The elements of the insurance contract are as follows:

The insurable interest The insurable risk The premium The insurer's obligation to indemnify

4.1 The Insurable Interest.

“Insurable interest is understood as the lawful relationship of economic value on a good. When this relationship is threatened by a risk, it is an insurable interest "

For Professor Montoya the interest is: "the relationship by virtue of which someone suffers property damage as a result of the planned event, which does not fall on what is the object of the insurance, but on the interest that the insured has in it…"

The insurable interest is a requirement that must be met by whoever wishes to cover some risk, reflected in their true desire that the claim should not occur, since as a result of which damage to their assets would arise.

The insurable interest principle will be easily understood if one takes into account what is being insured, that is, the object of the contract is not the thing threatened by an uncertain danger, but the interest of the insured in that the damage does not occur. Insurable interest is not only a simple requirement that insurers impose, but a necessity to ensure the nature of the insurance institution.

Indeed, if we take these premises into account, we would have that the existence of contracts without insurable interest, would necessarily produce an increase in claims and this would cause a rise in premiums and the true insured would have to pay a price higher than what would actually correspond to his risk, thus damaging not only him, but also the country's economy, which would have to bear a higher economic burden than it should.

4.2 Insurable Risk:

“It is a possible event, uncertain and future, capable of causing damage from which a heritage need arises. The event must be possible, because otherwise there would be no insecurity. The impossible does not create risk. It must be true, because if it is necessarily going to happen, nobody would assume the obligation to repair it….. ”

"Without risk there can be no insurance, because in the absence of the possibility of the harmful event occurring, there can be no damage, and no compensation can be considered."

The eventual nature of the risk implies the exclusion of certainty as well as impossibility, covering the fortuitous event, without ruling out the will of the parties, as long as the event is not inevitably and exclusively subject to it. The uncertainty must not be absolute but must be viewed from an economic perspective, for which the uncertainty of the time in which it will take place is sufficient, that is, whether it concerns the realization of the event or the moment in which it occurs. it will produce.

The risk has certain characteristics that are as follows:

It is uncertain and random Possible Concrete Licito Fortuito Of economic content

In the insurance contract, the insurer cannot assume the risk in an abstract way, but this must be duly individualized, since not all risks are insurable, which is why they must be limited and individualized, within the contractual relationship.

4.3 The Premium:

The premium is another of the essential elements of the insurance contract, it constitutes the sum that the insured must pay in order for the insurer to assume the obligation to compensate the losses and damages caused by the claim, if it occurs. This amount is set proportionally, taking into account the duration of the insurance, the degree of probability that the claim will occur and the agreed compensation.

In this regard Rodríguez Pastor points out: “it is the amount paid by the insured as a counterpart of the obligations, compensation and indemnity of the insurer. It is the price of insurance and an essential element of the institution. Represents the budget "juris" of the contractual relationship, so it must be canceled in advance, when the policy is issued… "

For Professor Montoya, the premium is: “the benefit that must be paid by the insured or the contracting party, or the policyholder, in exchange for which the insurer assumes the obligation to satisfy the harmful consequences of the risk ……. "

Thus we have that the premium is the price of the insurance that the insured pays to the insurer as consideration for the risk assumed by the insured and the commitment that is its consequence.

There are different types of bonuses:

Natural premium: In life insurance it is the premium that depends on the mathematical calculation of risk. For this reason, the higher the risk, the higher the natural premium, and vice versa. Pure premium: It is the risk premium of the other insurance lines. Commercial premium: this is the premium that the insured actually pays and consists of two parts.: the natural or pure premium on the one hand and the operating costs and the insurer's profit on the other. The most important of these expenses are:

Commission in favor of the producers who place the insurances. Collection commission that is paid to the collaborators for the perception of the premiums. Administration and advertising expenses. Premium for fractionation of the premium. The premium can be divided into periodic installments, and this gives rise to a surcharge, as is often the case with term sales. Security margin. This is a surcharge to anticipate any increase in expenses and in particular the possibility of increased risk.

Level premium: The simple application of the natural premium to calculate the commercial premium would make life insurance prohibitive, from a certain age. In this case, the commercial premium would increase continuously and a time would come when the insured would withdraw from the contract given the high price that he would have to pay for his insurance.

Therefore, it has been necessary to level the premiums so that the commercial premium is the same, in life insurance, throughout the term of the contract.

Single premium: this is what the insured must pay when it is done at a single opportunity. Periodic premiums: the single premium is paid with partial payments, thus offering the insured a possibility that can decide the concentration of these operations.

4.4 Obligation of the Insurer to Indemnify:

This obligation constitutes another of the necessary elements of the insurance contract, since if the contract is not indicated it does not take effect, being ineffective by law.

This element is significant because it represents the cause of the obligation assumed by the policy holder to pay the corresponding premium. Because the latter is obliged to pay the premium because it aspires that the insurer assumes the risk and complies with paying the compensation in the event that the claim occurs.

This obligation depends on the realization of the insured risk. This is only a consequence of the insurer's duty to assume the insurable risk. And although the claim may not occur, this does not mean the lack of the essential element of the insurance that we are now dealing with, since this is configured with the assumption of the risk that the insurer makes when concluding the insurance contract, the indemnity provision being required only in the event of the incident.

"The compensation is the consideration by the insurer to pay the amount corresponding to the damage caused by the claim, by virtue of having received the premium."

5. Subjects:

Within this contractual relationship we find the following subjects:

The insurer (Insurance Company) The policyholder The beneficiary

The insurer is the legal person that is expressly authorized by law to provide services as such and is also the one who assumes the risk and by virtue of this, is obliged to indemnify the policy holder or beneficiary for the production of a previously determined event and uncertain, in exchange for receiving a remuneration that is known as a premium.

The policyholder is the natural or legal person who seeks to transfer a certain risk to a third party (insurance company) in order for him or a third party to be compensated for any damages or losses that may derive from the occurrence of an uncertain event to date. of the insurance contract. For this purpose, you must pay a remuneration (premium) to the insurer.

The beneficiary, “is the person who, without being insured, receives the amount of the insured sum. Consequently, it is not obliged to pay the premiums to the company ……… ”.

It should be borne in mind that if the policyholder works on his own behalf, he is generally called insured or contracting, since he is the holder of the insurable interest that is threatened by the risk that he transfers through the insurance contract. In the event that this is not the case, and on the contrary, the policyholder works for someone else (for the benefit of a different person) from the third party who is entitled to receive compensation under the insurance and who is not properly part of the contractual relationship, He is known as a beneficiary, and he is not obliged to pay any premium, nor to comply with the insurance obligations, which will always correspond to the policyholder.

In this regard, Halperin points out: “the third party in whose favor it is contracted is classified as a beneficiary. It is not a party to the contract, even when it is designated in the policy, at the moment of contracting: only the policyholder and the insurer are parties ”.

6. Types of Insurance:

There are innumerable types of insurance, but after analyzing the classification made by various authors on the subject, the most accurate classification is as follows:

Interest insurance, which can be:

By the object.- the interest can be on a specific asset, on a certain right to an asset or derived from an asset and on all the patrimony. By the class of the insured interest.- it can be on the interest of the capital and the interest of profit.

People insurance, which can be:

Strictly speaking, insurance on human life - insurance in the case of death, survival, etc. Broadly speaking, insurance covering an event that affects health or bodily integrity.

In addition, depending on the importance of the topic, a more exhaustive classification on insurance can be added, thus we have the:

Accumulative Insurance.- the one in which two or more insurance entities independently and simultaneously cover a risk. All-risk insurance. - the one in which all the guarantees normally applicable to a certain risk have been included. Group insurance. People insurance, which is characterized by covering multiple insured persons that make up a homogeneous community through a single contract. Complementary insurance. Accident insurance.- the one whose purpose is to provide compensation in the event of accidents that cause the death or disability of the insured, due to activities provided for in the policy. Travel assistance insurance.- That insurance conducive to resolving incidents of various kinds that have arisen during a trip. Auto insurance. - The one whose purpose is to provide compensation derived from accidents caused as a result of the movement of vehicles. Illness insurance. is the one by virtue, in case of illness of the insured, an indemnity is provided previously provided in the policy. Fire insurance.- the one that guarantees the insured the delivery of compensation in case of fire of their assets determined in the policy or the repair or compensation of the same. Orphan insurance. - one whose purpose is to grant a temporary pension in favor of children under 18 years of age in the event of death of the father or mother on whom they depend economically. Insurance of people.- the one characterized by the fact that the insured object is the human person, taking into account their existence, health and integrity when paying the benefit. Insurance against theft. - the one in which the insurer agrees to indemnify the insured for the losses suffered. as a consequence of the disappearance of the insured objects.Transport insurance.- the one for which an insurance entity undertakes to pay certain indemnities as a consequence of the damages caused during the transport of goods. Life insurance.- is that in which that the payment by the insurer of the amount stipulated in the contract is made depending on the death or survival of the insured at a certain time.health and integrity when paying the benefit. Theft insurance. - The one in which the insurer agrees to indemnify the insured for the losses suffered as a result of the disappearance of the insured objects. Transportation insurance. insurance company undertakes to pay certain compensation as a result of the damage caused during the transport of goods. Life insurance.- is one in which the payment by the insurer of the amount stipulated in the contract is made depending on death or survival. of the insured at a certain time.health and integrity when paying the benefit. Theft insurance. - The one in which the insurer agrees to indemnify the insured for the losses suffered as a result of the disappearance of the insured objects. Transportation insurance. insurance company undertakes to pay certain compensation as a result of the damage caused during the transport of goods. Life insurance.- is one in which the payment by the insurer of the amount stipulated in the contract is made depending on death or survival. of the insured at a certain time.- the one for which an insurance company undertakes to pay certain indemnities as a consequence of the damages caused during the transport of goods. Life insurance.- is the one in which the payment by the insurer of the amount stipulated in the contract is it does depending on the death or survival of the insured at a certain time.- the one for which an insurance company undertakes to pay certain indemnities as a consequence of the damages caused during the transport of goods. Life insurance.- is the one in which the payment by the insurer of the amount stipulated in the contract is it does depending on the death or survival of the insured at a certain time.

7. The Insurance Policy

It is the written instrument in which the conditions of the contract appear. Although it is not essential for the contract to exist, the insurance practice has imposed it without exceptions.

It can be issued to the order or to the bearer, except in personal insurance, where it must be registered.

The text is generally uniform for the different types of insurance. The additional and special clauses and the modifications to the content of the policy are called endorsements and are drawn up on a separate sheet, which adheres to it.

"The policy is the main document of the insurance contract, which contains the rights and obligations of the parties… It is a private document written in several pages. The general conditions are printed, while the particular conditions are normally typed ”.

The insurance policy must contain:

The information necessary to identify the insured and the insurer, and if necessary, the name of the beneficiary. Policy issue date, validity period. Description of the insurance, the risks covered and the amounts insured. The designation and condition of the objects that are insured. The specification of the premium that the insured must pay, as well as the form and place of payment. The grounds for termination of the contract. The procedure to claim compensation in the event of the incident. Clauses that clarify or modify part of the content of the policy contract. The definition of the most important terms used in the policy. The indication of existing insurance on the same object and risk.

In turn, insurance policies contain certain conditions that are as follows:

General Conditions: Those established to be applied to all insurance contracts of the same class issued by the insurance entity, these represent the set of rules that the insurer establishes to regulate the legal operation of each contract it issues, the general conditions are uniform for all insurance contracts of the same type issued by the same insurance company.Particular Conditions.- Those that individualize the insurance and with respect to which the wills that generate the agreement of the contracting parties and give rise to the corresponding contract of safe. They prevail over the general conditions due to their specific nature. Special Conditions: these conditions are usually introduced in certain types of policies according to their specific function,to the nature of the objects or to the insured persons. These conditions tend to delimit a certain clause or set of clauses, they also prevail over the general clauses.

7.1 Classification:

Policies can be classified into:

"Regarding the scope of application…

Simple.- are those in which the object is precisely determined, without being able to be replaced. Floating.- are those that cover a plurality of objects, replaceable, while the contract lasts.

In relation to the subject in favor of which they extend:

Nominative (determined person) To order (determinable person) (Many writers maintain that these documents do not become credit titles). To the bearer (undetermined person). Individual and collective (According to the singular or plural number of the insured). Automatic (no risk assumption date) and Revaluation (adjustable to prevent inflation).

Regarding the way of writing them:

With printed clauses, they contain the general conditions used for all kinds of risks. They must be approved by the competent authority (…) With handwritten clauses, they contain the particular conditions according to the specific nature of each risk. In the event that discrepancies arise between the two forms (…) ”

8. Reinsurance

In this regard, Uría points out: “Reinsurance is a form of insurance that covers the risk that insurers assume when stipulating direct insurance contracts with their clients. Its purpose is to compensate the patrimonial damage that the direct insurer experiences when the event that forces the insured to indemnify occurs …… ”

"It is the contract that one insurer enters into with another to protect itself from the consequences of the insurance that it has granted, insofar as it exceeds its capacity and convenience, transferring part or all of the risks to the reinsurer under the conditions agreed between both. It is a way of spreading the risks, keeping the responsibility before the insured. Reinsurance can be contracted under conditions equal to or more or less favorable than those of insurance. And as special characteristics it has those that do not extinguish the obligations of the co-insurer, nor confer direct action on the insured against the reinsurer. Therefore, reinsurance is an independent insurance contract, with its own modalities and its conclusion or termination does not influence the insurance contract. ”

Professor Montoya tells us: “This is a figure by virtue of which an insurer discards the risks he assumes vis-à-vis his policyholders, making sure, in turn, to satisfy the compensation he must pay, if necessary. In this way it is an insurer vis-à-vis the insured and is insured with respect to the reinsurer ”.

The mission of the reinsurance institution is to distribute the risks assumed in the insurance contract so that the insurer can fulfill its obligation to indemnify in the event of a claim or set of claims that would generally involve the disbursement of a very high monetary sum, the same that could exceed the economic-financial possibilities of the insurance company.

Although the insurance contract operates as a reinsurance budget, this is an autonomous contract because it has its own source, which is the respective contractual agreement between the reinsurer and the reinsured (insurer), the parties that celebrate it are different in relation to the contract of insurance and because it has intrinsic modalities that keep independence with respect to those of the insurance, in addition to not causing its formation or extinction any repercussion regarding the insurance.

Reinsurance is a contract that has the following characteristics:

Consensual.- This attribute occurs more frequently than in the insurance contract. Onerous.- it is onerous because the coverage has, as an obligatory benefit, a cash premium in charge of the assigning insurer. Of successive tract. - Because said coverage extends over time, in relation to direct insurance. Random.- because the reinsurer suffers the same fate as the insurer. Bilateral.- is an indispensable character, since reciprocal rights and obligations are created, which must be stated in the contract. Accessory.- because it requires the prior coverage of the direct insurer for its improvement. Nominated.- because the name of reinsurance is provided in the respective laws. Atypical.- because it is not regulated by any law.

9. Coinsurance:

Halperin classifies the co-insurance as a contract “… executed by the insured simultaneously with more than one insurer on the same risk; that is, it assumes a plurality of insurances; requires the consent of the insured… ”

Coinsurance is a contract in which there is a planned and ordered insurance on the same interest and therefore on the same risk, but which is concluded with several insurers, where each of them assumes a portion of the total risk.

Coinsurance is agreed upon by means of a policy issued for the benefit of the insured and signed by all the co-insurers, indicating the quotas corresponding to each of them, whose added value constitutes the unit of insurance. One of the co-insurers, duly appointed by the set or majority of them, must assume the administration of the contract, for which the powers of the case will be authorized.

The insurance company in charge of the administration and management of the co-insurance contract is known as the “leader” company and is in charge of coordinating the relations between the insured-policyholder and the co-insurers, who are integrated into a consortium for said contractual relationship.

9.1 Difference between Multiple Insurance and Coinsurance

In the first place, it should be mentioned that multiple insurance "takes place when the same interest is insured against the same risks and at the same time by different insurers, without the sum insured by each of them having been determined in agreement with the others.. "

This situation occurs when there are several insurances of the same type on the same object, in such a way that if the loss, deterioration or destruction of the object occurs as a result of a claim, each insurer would pay compensation, with which the real value would be exceeded of the object and would be a cause of profit for the insured.

That is why, unlike co-insurance, multiple insurance contemplates the possibility that the object may be insured for a higher value than the real one, since several contracts are concluded and if the claim occurs, each insurer indemnifies the insured; unlike coinsurance in which the responsibility to indemnify is divided proportionally between each of the co-insurers.

In addition we also have that, in multiple insurance there are several insurers that insure separately, but simultaneously the same object, the same interest and the same risk; unlike co-insurance where there is also a plurality of insurers, but all of them jointly insure the same object, the same interest and the same risk.

Finally, we have that in the multiple insurance there is a lack of consent of the insurers regarding said situation, on the other hand in the co-insurance if there is a prior agreement between all the insurers in the sense of insuring between them the same object, the same interest and a same risk that generally appears in a single insurance policy.

10. The Underinsurance

We can speak of underinsurance, if we have that the sum insured is less than the value of the insured interest, in this case it is estimated that the insured is only protected in terms of the damage suffered by the object when the incident occurs, in a percentage equal to that represent the insured amount in relation to the value of the insured interest.

In this regard, Halperin points out: "There is underinsurance… When the insured amount is less than the total value of the insurable interest. It is perfectly possible and lawful, whether it is an aliquot part or not.

Its effect is to make the proportional rule apply; that is to say that for the part not covered the insured bears the damage to the extent of the underinsurance; and when the claim is partial, the insurer must only indemnify in proportion….

Its foundation lies in the proportionality and the compensation to the premiums paid; the insurer would be harmed in unfair benefit for the insured, since this would appear receiving a disproportionate compensation to the premiums that I actually pay ”.

11. The Overinsurance

There is over-insurance when the sum insured is higher than the value of the insurance, in this regard Professor MONTOYA tells us: “In the safe envelope the sum insured is higher than the value of the interest, which causes a situation of danger for the insurer, since the The insured will have no interest in the preservation of the thing and may be tempted to cause the loss, in order to obtain as compensation an amount greater than the real value of the insured. ”

The insurance envelope can take place in good faith, without the insured's willingness to charge the insurer a higher amount than the damage that may be incurred if the claim occurs. But one can also act in bad faith, that is when the insured person indicates as insured sum one that he knows exceeds the value of the insured interest, in order to obtain an economic benefit, this attitude denatures the insurance contract.

12. Obligations of the Insurer

Regarding the main obligation of the insured, a certain sector of the doctrine indicates that it is the insurer's responsibility to preserve its technical-economic capacity to face its duty to pay compensation, however I disagree with this position, since the entities of Insurance providers are supervised by the National Superintendency of Insurance Banking, therefore said obligation is not for the insured but for the State.

Another sector of the doctrine indicates that the main obligation of the insurer is to assume the risk.

Regarding the obligation to pay compensation in the event that the loss occurs, it is my opinion that this is the main obligation assumed by the insurance company. This is because the insured is obliged to pay the premium in exchange for the firm commitment that the insurer compensates him in the event of the loss, then the duty to indemnify means the cause of the insured's obligation.

There are also other obligations such as:

Obligation to deliver the insurance policy and attached documents.- With this, the insurance contract is perfected, whose formal validity begins from the date on which the insurance provider delivers this document, therefore it is the obligation of the insured entity to deliver an original copy to the insurer-policy holder, together with all the relevant annexes. Obligation to reimburse the unearned premium.- The obligation to reimburse the unearned premium, part of the premium received, is required in certain cases in which, due to the absence of insurable interest or risk or the will of any of the parties, the responsibility of the insuring entity ceases. Obligation to pay the insured benefit.- represents the cause of the obligation assumed by the policy holder, since he pays the corresponding premium,Because it intends that the insurer assumes the risk that is in the insurance contract and complies with paying the compensation in the event of the loss.

13. Obligations of the Insured-Policyholder:

The insured also has to fulfill various obligations, in fact, in addition to paying the premium, he has to fulfill others that result from the insurance contract, such as reporting and conduct obligations.

The first ones refer to providing reports about circumstances that are transcendental for the insurer to form a vision of the status of the risk, the time of the formation of the contract and during the validity to know about all the circumstances that may aggravate the risk, also must provide all the information of the claim (if it occurs), the transmission of the insured object, the plurality of insurances, among others.

With regard to the obligations of conduct, they consist of the active or omitted behaviors of the insured, such as the obligation to save the insured objects, not to increase the risk, etc.

Among the main obligations that the insured-policy holder must assume we have:

Obligation to pay premium Obligation to declare risk status Obligation to preserve risk Obligation to preserve risk status Obligation to declare co-existing insurance.

Conclusions

1. We have that the object of the contract is to indemnify the insured, after paying a premium to the insurer, we must take into account that this compensation is variable since it is subject to the occurrence of the claim.

2. We have that the insurance contract is not always considered as a membership contract, although it is true among the characteristics that of being a member is this is not always the case, since it is possible that it is consensual, this It will depend on the will of the parties, the policy issued, the risk covered, etc.

3. The classification given by the authors on the insurance contract is diverse, however, within the work, an attempt has been made to unify the classification into two main branches: interest insurance and personal insurance.

4. Regarding the essential elements of the insurance contract, we have: the insurable interest, which is the insured person's desire to protect an object; insurable risk, which is an uncertain event that may occur and which is described in the insurance contract; the premium, which is the amount paid by the insured in exchange for compensation in the event of the loss; and the obligation to indemnify, which is the responsibility of the insurer since the latter received the premium payment in exchange.

5. We also have other insurance figures such as reinsurance, which is the insurance operation carried out by the insurer, by which it transfers part of the risks assumed to the reinsurer, but is the only one liable with respect to the insured or policyholder.

6. Other figures are also Coinsurance, which is when the coverage of a risk is shared between two or more insurers, establishing a contractual relationship between each co-insurer and the insured; underinsurance is when the value that the insured has attributed to the insured good or assets in a policy is less than what they actually have; and the overinsurance is when the insurable interest is insured for a higher value than the real one.

7. Finally we have that the policy is the evidentiary instrument par excellence of the contract concluded between the insured and the insurer. It is advisable before celebrating it, to read all the clauses contained in it, to have complete information on its terms and conditions. It reflects the rules that generally, particularly or specially regulate the contractual relationship agreed between the insurer and the insured.