Previously, we discussed the law of the sea, namely the Indonesian Continental Shelf. Now we will discuss insurance law, namely the principles in insurance. Let’s see the discussion.

The principle is a static norm that serves as a guide in the formation of positive law, meaning that every insurance agreement and insurance legislation should not conflict with the principles of insurance agreements so that in insurance business practice it must be in accordance with the principles in insurance.

The principle of indemnity

The principle of indemnity is one of the main principles in the insurance agreement because it is the principle that underlies the working mechanism and gives direction to the goals of the insurance agreement itself. The insurance agreement has a main and specific purpose, namely to provide compensation to the insured party by the insurer. The definition of loss must not cause the insured party’s financial position to be more profitable than the position before suffering a loss. So, limited to the initial state / initial position, meaning that it only returns it to the initial position.

The Commercial Code, regarding interests, regulates it in two articles, namely Article 250 and Article 268. Article 250:

“If a person has made an insurance for himself, or if the person for whom an insurance has been held, at the time the insurance is made does not have an interest in the goods insured, then the insurer is not obliged to provide compensation.”

Article 268:

“An insurance can cover all interests that can be valued in money, can be threatened by a danger, and are not excluded by law.”

So in essence, every interest can be insured/insured, both material interests or rights interests, as long as they fulfill the conditions required by Article 268 above, namely that these interests can be valued in money, can be threatened with danger and are not excluded by the law. Constitution.

This is no longer sufficient because the insured interest is no longer limited to an interest that can be valued in money as is the case with a person’s life. The needs of the community have far exceeded the need for fire insurance solely to cover their interests considering the risks that arise and then give rise to the need for new types of insurance. Limitations on objects of insurance in Article 268 of the KUHD include objects of insurance for interests that can be valued in money, can be threatened with danger, are not excluded by law, are not in accordance with the practice of the insurance industry for a long time.

Insurable Interest Principle

The principle of insurable interest is the second main principle in the insurance/coverage agreement. The point is that the insured party has involvement in such a way with the consequences of an event that is not certain to occur and the person concerned suffers a loss. Every party who intends to enter into an insurance agreement must have an insurable interest, meaning that the insured party has such involvement with the consequences of an event that is not certain to occur and the person concerned suffers a loss.

The principle of perfect honesty in insurance agreements

This principle is also commonly used by other terms, namely: the best good faith. The principle of honesty is actually the principle for every agreement, so it must be fulfilled by the parties who entered into the agreement. The principle of honesty is actually the principle for every agreement, so it must be fulfilled by the parties who entered into the agreement. Failure to comply with this principle at the time of closing an agreement will result in a defect of will, as is the meaning of all the basic provisions regulated by Articles 1320-1329 of the Civil Code. After all, good faith is one of the main foundations and trust that underlies every agreement and the law basically does not protect parties with bad intentions.

The principle of subrogation

for the insurer, even though it does not affect the validity of the insurance agreement, it needs to be discussed, because it is one of the principles of the insurance agreement which is always enforced at certain times and in certain circumstances in order to apply the first principle of the insurance agreement, which is for the purpose of providing compensation, namely the principle of indemnity. In the Commercial Code, this principle is expressly regulated in Article 284:

“An insurer who has paid for the loss of an insured item, hangs in all the rights he has obtained against a third person in connection with the issuance of the loss, and the insured is responsible for any actions that can harm the rights of the insurer against the third person.” .

The principle of subrogation for the insurer, as regulated in Article 284 of the Commercial Code mentioned above, is a principle which is a logical consequence of the principle of indemnity. Considering that the purpose of the insurance agreement is to provide compensation, it is unfair if the insured occurs, because with the occurrence of an event that is not expected to be benefited. This means that the insured, in addition to having received compensation from the insurer, still gets another payment from a third party (even though there is a right reason for that).

Subrogation in insurance is subrogation based on law, therefore the principle of subrogation can only be enforced if it fulfills the following two conditions:

  1. If the insured has rights to the insurer, he still has rights to third parties.
  2. This right arises because of the occurrence of a loss.

In general, the principle of subrogation is also expressly regulated as a policy requirement, with the following formulation:

  1. In accordance with Article 284 of the KUHD, after the payment of compensation for the property insured in this policy, the insurer replaces the insured in all rights obtained against third parties in connection with the compensation. Subrogation in the paragraph above applies automatically without requiring a special power of attorney from the insured.
  2. The insured remains responsible for harming the rights of the insurer against third parties. So in the insurance agreement, the principle of subrogation is carried out either by law or by agreement.
  3. Policy as insurance agreement document

Basically, every agreement requires a document. Every document in general has a very important meaning because it functions as evidence. The importance of documents as evidence is not only for the parties, but also for third parties who have a direct or indirect relationship with the agreement in question.

Often in reality, the application of insurance principles is not fully implemented in a strict manner. The imbalance between the terms and conditions in the insurance agreement clauses that tend to be burdensome to the customer, so that there is hope for strengthening the customer’s bargaining position and providing incentives for responsibility to the insurer that is not or very lacking. Although sometimes it is due to the customer’s own ignorance regarding the procedure for submitting a claim. The principles of insurance if applied in the insurance agreement will reduce legal problems in practice.

Insurance can be regarded as an institution that is in the wider community. In essence, an institution always takes actions that are not for its own sake, but also for the benefit of others, to fulfill certain tasks, and so on. Likewise with the existence of insurance where an insurance company is a community institution as a social goal. Because of that insurance institutions always offer their products to the public.

Excessive promotion by insurance agents, who only explain positive things, is not transparent in selling insurance products, after the product is successfully sold the insurance agent actually distances himself from the insured. Of course, the attitude of insurance agents like this is contrary to the mission of consumer protection. Even to the point of including investment in the insurance program that the company runs. Is this action in accordance with the principle of good faith (utmost good faith) of both parties in the insurance agreement?

Insurance agreements gave birth to various programs where there were no definite rules that were used as the basis for the implementation of these various insurance programs. Insurance grows because more and more various risks are faced in various aspects of life. One of the efforts to overcome this risk is insurance.

Risk is uncertainty or uncertainty that may give rise to losses. Therefore, the need for insurance services is increasingly felt by both individuals and the business world. Insurance is a financial means in managing household life, both for basic risks such as the risk of death or the risk of the property. Likewise, the business world in carrying out its activities in the face of various risks that may interfere with the continuity of its business.


  • Abbas Salim, Dasar-dasar Asuransi, Raja Grafindo Persada, Jakarta, 1995, hlm 3
  • Dwi Endah Ernawati, Penerapan asas-asas asuransi dalam perjanjian asuransi kendaraan bermotor, Jurnal Portal, 2009.
  • Fauzi, A., Hukum Asuransi di Indonesia, Andalas University Press:Padang, 2019.
  • Herman Darmawi, Manajemen Asuransi, Jakarta: Bumi Aksara, 2000, cet 1, hlm. 1.
  • Peter F. Drcker, management : Tugas dan Tanggung jawab Praktek asuransi, Jakarta, Gramedia, 1981, hlm 40