Honey the Hamster

[2] Business Laws, Difference Between Insurance Contract and Betting Contract accessed May 5, 2016 At first, you realize that there are significant differences between insurance and betting, one of which is insurable interest. When the concept of insurance appeared, it was considered as one and the same betting contract, although the concept of insurance differs from that of betting with the development of the theme. Nowadays, although they may seem similar, they are clearly separated from each other. We try to highlight the main differences between insurance and betting. [2] In addition, insurance contracts are by nature compensation contracts. This is the guarantee of stability against possible losses. The only exception is life insurance. On the other hand, there is no compensation in betting agreements. Therefore, the amount to be paid is due according to the outcome of the agreed event. [11] 4.

Insurance contracts are based on the scientific and actuarial calculation of risks, where betting contracts are a bet without scientific calculation of risk. There is no substantive insurance law in Maltese law, so the courts of Malta turn to English law, in particular the Marine Insurance Act 1906. In section 5 of that Act, there is a definition of insurable interest: “if he has a legal or equitable relationship with the adventure or with insurable property threatened therein, by which he can benefit from the security or the proper arrival of insurable property or may be affected by their loss, or by damage caused to them or by their imprisonment or may be held liable for them”. [6] 1. An insurance contract is a contract to compensate for the loss of property (or lives) of another person in exchange for a consideration called a premium. 3. Insurance contracts shall be compensation contracts, with the exception of the life insurance contract, which shall be a conditional contract. But a betting agreement is a conditional contract. The insurance contract is a legally enforceable document that specifies the coverage, characteristics, conditions and limits of the contract. An insurance contract, i.e.

life, accident, fire, marine, etc., is not a bet, although it can be executed in the event of an uncertain event. It is because; the principle of insurable interest distinguishes insurance from a betting contract. Insurable interest is the interest one has in the security or preservation of the purpose of the insurance. If there is no insurable interest in insurance contracts, it becomes a betting contract and is therefore void. (2) In an insurance contract, the insured must have insurable interest. Without insurable interest, it will be a betting contract. A betting agreement is an agreement in which two or more parties with conflicting opinions about an uncertain future event that may or may not occur will jointly agree that the winner will receive a sum of money or otherwise after the outcome of the event. [7] Gambling, another term for betting, requires various elements to be legal in Malta. This includes authorisation from the Malta Gaming Authority, which is one of the excluded elements of a bet. Betting of any form, unless authorised by the competent authority, is considered a criminal offence in Malta under the Lotteries and Other Games Act (LOGA) [8] and the Criminal Code.

[9] The Civil Code also stipulates that no civil action may be brought in the light of a betting agreement, with the exception of certain exceptions referred to in Article 1714. It also provides that any party who has suffered losses on the bet has a remedy to compensate for the losses, unless the bet is one of the exceptions previously indicated. [10] Betting agreements are not based on such calculations and have the character of gambling. Below are the distinguishing features between betting agreements and insurance contracts. The scope of an insurance contract is that in the event of an uncertain event, the insured would attempt to mitigate or restore the condition before the consequences of the event that occurred. For betting, the motivation behind such agreements is different. In this, the parties would expect to improve their position if they had chosen the right outcome of the uncertain future event. Thus, the room for maneuver in betting is to improve their position, and in insurance it is to secure them. Players take unnecessary risks. Insurers try to prevent catastrophic losses when likely events such as fires and earthquakes occur. Betting is an attempt to make money. The insurance only pays for the repair or replacement of the destroyed goods.

There is no reason for profit in insurance. Bets are not enforceable in court. You cannot sue for unpaid gambling debts. Insurance contracts are enforceable in court. The only restrictions are that the premiums have been paid and the damage is covered by the insurance contract. If this is the case, the insured may bring an action for payment. 1. The parties have no insurable interest (iii) in entering into a paris agreement. But the holder of an insurance policy must have an insurable interest. Although insurance contracts may infringe a particular law if they are not properly approved, they are enforceable in the courts of Malta if they meet all the characteristics of the insurance. On the other hand, with the exception of a few circumstances, the betting agreements in Malta are considered null and void and the terms of the agreement are unenforceable before the courts.

Therefore, we can see that although the principle pacta sunt servanda applies to insurance contracts, it does not apply to betting agreements, in Police v. Carmelo Spiteri, the judge, how important it is that the insured has an insurable interest for the insurance contract to be valid. Otherwise, if an insurance policy has been purchased and there is no insurable interest, the policy is void. [5] In insurance, you have a principle of Uberrima Fides, absolutely faithful and faithful, which applies to both parties. This principle implies that all parties disclose all information that is important to the contract, otherwise such a contract is void. Such a principle does not apply in a Paris agreement, since the agreement is a principle of competitiveness. The insurance covers losses in the event of certain events. For example, flood insurance only pays if a property in a flood zone is damaged during a flood.

The risk is known, only the timing is unknown. Bets cover random events such as dog races or lotteries. The result is unknown, although the time the result is revealed is listed in a calendar. 6. An insurance contract is a valid contract in which a betting agreement is void and is expressly declared by law. According to Maltese agreement requirements, the doctrine of pacta sunt servanda generally applies, unless specific legislation to the contrary. This is a principle of international law that means that “promises must be kept”. [1] Betting and gambling have always been condemned by organized religions as a challenge to predestination ordered by the Divine. Insurance, the act of mitigating total catastrophe risk, is considered good. Nevertheless, it is possible for speculators to gamble with insurance by investing money in mutual insurance funds in the hope of a higher return. While some people look at these two concepts and try to use them interchangeably, they are different and each focuses on specific circumstances.

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