Marine Insurance Contracts : Return of premium, Marine Insurance contracts: As per sec. 84 of the Marine Insurance Act-(01) Where the consideration for the payment of the premium totally fails and there has been fraud or illegality on the part of the assured, or his Agent the premium is thereupon returnable to the assured. (02) Where the consideration for the payment of the premium is apportion-able, and there is a total failure of any appropriate part of the consideration a proportionate part of the premium is, under the like conditions. there upon returnable to the assured. (03) In particular- (i) Where the Policy is void, or is avoided by the Insurer as from the commencement of the risk, the premium is returnable provided there has been no fraud or illegality on the part of the assured, but if the risk is not apportion-able and has once attached the premium is not returnable. (ii) Where the subject matter insured or part thereof, has never been imperiled the premium or, as the case may be, a proportionate part thereof, of returnable, Provided that where the subject matter has been insured “lost or not lost” and has arrived in safety at the time when the contract is concluded the premium is not returnable unless at such time the Insurer knew of the safe arrival. (iii) Where the assured has no insurable interest throughout the currency of the risk the premium is returnable provided that this rule does not apply to a Policy affected by way of wagering. (iv) Where the assured has a defeasible interest which is terminated during the currency of the risk the premium is not returnable. (v) Where the assured has over-insured under an unvalued Policy a proportionate part of the premium is returnable. (vi) Subject to the foregoing provisions, where the assured has over insured by double Insurance, a proportionate part of several premiums is returnable. Provided that, if the policies are effected at different times, and any earlier Policy has at any time borne the entire risk, or if a claim has been paid on the Policy in respect of the full sum insured thereby, no premium is returnable in respect of that Policy, and when the double Insurance is effected knowingly by the assured no premium is returnable.
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When a risk for which the insurer has accepted a premium fails to attach thee is said to be a failure of consideration and the insured, if he acted in good faith, may recover the premium.