Mutual Insurance
A group of people or companies may join together to provide their own insurance — this is called mutual insurance. An example in Cameroon is the system operated by Credit Unions (MUPES), which provides loan and life safety insurance — when a member dies, the family receives special assistance and the member’s liabilities to the company are cleared.
Insurance Principles
- Insurable interest: an insured should only take out insurance on their own property, not someone else’s.
- Indemnity: the insured should be restored to the position they were in before the loss — this applies to most risks except those related to life, like personal accident.
- Utmost good faith (uberrima fides): the insured must tell the whole truth about the property being insured, filling in the proposal form honestly.
Doctrines of Insurance
- Proximate cause: the insurer only compensates risks within the terms of the contract.
- Contribution: if the same risk on the same property is insured with several companies, each contributes only a portion of the total loss when a claim arises.
- Subrogation: gives the insurer the right to become the owner of the property once they’ve compensated the insured — e.g. if a stolen, insured car is found after the owner is compensated, the insurer owns it.
