Insurance contracts may be classified on the basis of:-
1. The event insured: The category of insurance derives its name from the event e.g.fire, burglary, marine, fidelity, motor etc.
2. The Interest Insured: The classification places contracts in 3 categories namely: –
a. Personal Insurance e.g. Life Insurance
b. Property Insurance
c. Liability Insuring e.g. NSSF, NHIF, 3rd Party Motor Insurance
3. Nature of the Contract: –
Indemnity is a contract wherethe insured takes out a policy on the understanding that when loss occurs he will be compensated for the loss. This is property insurance e.g. Fire, burglary, marine.
Non-Indemnity contract is a contract wherea party known as the insured takes outa policy to secure the payment of a sum of certain in money when risk attaches e.g. life insurance.
6. Whether Private or Social: private insurance is optional while voluntary, social or compulsory insurance is a statutory requirement e.g. 3rd party Motor Insurance.
7. Basis of the Programme:
b. Reinsurance: This is a contract in which an insurer insures himself with re-insurer against the risks he has insured against. It may be voluntary or compulsory.