Legal System behind the Car Insurance

You probably already know that under Sri Lankan law, you can't put a vehicle on the road without having it insured. When talking about insurance, there are various types covering different kinds of damage. Then there's the question of how to claim insurance, and the related laws that come into play. You might know some of these things already, but let's see if you were aware of everything we're about to cover about the legal aspects of insurance in today's MotorGuide segment.

Contract Law

When discussing the legal system around insurance, we must talk about contract law. This law applies to the relationship between the insurer and the insured. Here, the insurer is the insurance company, and the insured is the person making the deal with the insurance company. It's important to note that just because the insurer and insured come together, it doesn't automatically mean a contract exists. Several key elements must be present for a valid contract to be established.

A contract requires an agreement involving at least two parties (or more) expressed in the form of an offer and an acceptance. This offer can be made either in writing or verbally. An offer typically involves a proposal made by a prospective customer to the insurance company. We refer to them as a prospective customer because they only become an actual customer after the contract is finalized. In simple terms, the prospective customer becomes an insured party only after their proposal is accepted by the insurance company.

Form

Insurance contracts must be prepared in writing, as specified in insurance law. Since these contracts are in written form, they must follow a particular format. This means that the contract must be documented in a specified format. When you insure a vehicle, you are provided with a form. This form includes details of the coverage, information about the insurer, and specific details about the vehicle, among other relevant information you need to provide.

So, that's a glimpse into the legal system around insurance that you must be aware of. You might think these are just small details, but these little things add up to what insurance really is. In short, these aspects are all part of the laws related to insurance. By understanding these details correctly, you can ensure your vehicle is properly insured without any issues!