Credit insurance is a form of property insurance, property insurance, which aims to cover the risk of default by a debtor. In this insurance, the insurer will indemnify the insured to the amount that was previously agreed, when the debtor was insolvent or have passed the deadlines set in the insurance contract without the debtor has paid his debt.
To determine the debtor’s insolvency, Article 70 of the Insurance Contract Act, includes the following assumptions:
If the debtor has been declared bankrupt by a final court decision.
If it has been judicially approved an agreement involving a remission of the amount due.
If once made writ of execution or urgency, the free goods but not enough to prove payment.
If insured and insurer agree that credit is bad.
Anyway, if within three months of the insured to the insurer notice of loan default, it will pay that 50% of the agreed coverage, provisional and definitive account of the subsequent liquidation.
As for the compensation to be received by the insured it is determined by the percentage to be established in the contract regarding the final loss incurred by the insured.
In credit insurance, it establishes a general rule that the insurer must accept pre- and particular risks incurred by the insured. Thus, the insured must receive compliance by the insurer of risks that can accept both as regards the identity of the debtor and the amount to accept.
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