The following are the rights of the insurer:
1. Right to avoid the policy.
Utmost good faith is an implied condition in an insurance contract and places upon the insured a duty to deal honestly with the insurer when a claim arises. Fraud will avoid the policy, so also will full fire caused by the insured or with his connivance.
2. Right of entry and control over the property.
On the happening of any loss or damage to any of the property insured, the insurance company may enter and take and keep possession of the building or premises where the loss or damage has happened. These rights are necessary for the insurer to ascertain the cause and extent of loss or damage, to minimize the damage and to protect the salvage.
3. Right of reinstatement.
The insurance company may at its option reinstate or replace the property damaged or destroyed instead of paying the amount of the loss or damage in money. The insured has no tight to claim reinstatement. The main object of this right is to have some protection against unreasonable or exaggerated claims.
4. Right to subrogation.
After the payment of the policy money, the insurer is entitled to all the rights and remedies which may be possessed by the insured in respect of the subject-matter of insurance. This right of the insurer whereby he steps into the shoes of the assured is called the right of subrogation. The insurer must first pay under the policy of insurance before he can claim the right of subrogation. But the insurers are usually enabled to exercise the right of subrogation even before the payment, by an appropriate policy condition.
5. Right of contribution.
Where a person has taken out more than one policy, against the same risk with several insurers, the payment of the full amount of the insured’s loss by one or more of the insurers will discharge the other insurers from their liability. The insurers who have paid are entitled to call upon the others to contribute proportionately towards the loss. This is called the right of contribution amongst the co-insurers.
6. Right to salvage.
After a fire has occurred, it is the duty of the assured to hand over the salvage to the insurer. The insurers are entitled to the salvage for whatever it is worth. Where the insurer pays for a loss in full, he is entitled by way of salvage to all that remains of the thing insured. The insurer becomes owner of the salvage as from the date of the fire.