Economy Risk Classification And Legal Principles In Insurance Coverage For Modern Insurance Practice In Indonesia

Abstract

This study analyzes the legal principles underlying insurance coverage and economy risk classification in modern insurance practices. The principles of insurance law: utmost good faith, insurable interest, indemnity, subrogation, proximate cause, are important foundations in regulating the relationship between the insurer and the insured. On the other hand, risk classification plays a crucial role in the assessment, premium determination, risk selection, and risk management by insurance companies. The method used is a literature study with a normative approach, examining regulations, legal doctrines, scientific literature, and practices in the insurance industry. The results of the study indicate that a deep understanding of the principles of insurance law and risk classification can improve transparency, contractual fairness, moral hazard risk mitigation, operational efficiency in the insurance industry. Risks in insurance are classified into two main categories, namely pure risk which is related to the possibility of loss alone and speculative risk which involves the possibility of profit or loss. The six basic principles of insurance law, insurable interest, utmost good faith, proximate cause, indemnity, subrogation, contribution are the foundation for the formation and implementation of a valid insurance contract. The development of digital technology, the use of big data, artificial intelligence, machine learning in the insurance sector, has brought significant changes to risk classification methods, underwriting, and claims assessment processes. In conclusion, a comprehensive understanding of legal principles and risk classification is essential to ensure legal protection, increase public trust, and support the sustainability of health and general insurance practices in the modern era for Indonesia.