C81 study 4/C82 study 1 & 2 Flashcards
the term used for insurance protection
Coverage
An application contains:
C- characteristics of risk
A- amount of insurance required
P- personal info
E-essential details necessary to take on the risk
implies a standard of honesty greater than that usually required in most ordinary contracts. It is one of the essentials of a contract of insurance. It is required if both the insured and the insurer.
Utmost good faith
is misleading the insurer as to material facts affecting a policy or the settlement of a loss either by directly lying or by not disclosing certain information.
also
an incorrect statement made about a material fact. It can also include an omission of certain facts.
Misrepresentation
is something affecting a contract of insurance important enough to change the agreement between the company and the policyholder. It could determine the amount of premium to be changed, the amount and type of coverage to be provided or whether coverage is provided at all. _______ must be disclosed. An insurer must also be notified to a risk after a policy has been issued.
Material facts
A material fact, if known, can change 1 in 3 things:
1) The acceptability of a risk
2) The amount of premium charged
3) The type of coverage offered
the amount of a loss which the insured must pay. It is deducted from the total amount of loss to determine the amount the insurer must pay. ___ can come in any amounts but do not apply to all policies.
Deductibles
(common law provinces) are conditions required by law as promulgated by provincial legislature. The provincial Insurance Acts set out certain conditions that must form part of every insurance policy covering certain classes of risks. These conditions are deemed to apply even if they are not actually mentioned in the policy or document.
Statutory conditions
(Quebec) are statutory in nature in that provincial legislation sets out the subject matter that must be covered be these conditions although it does not specify the exact words that must be used.
General conditions
A binder and cover note are temporary insurance. How long are you approx. covered for under these?
30 days.
is the instrument evidencing a contract. It states the exact terms and provisions of the contract, in other words, the agreement made between the insured and insurer.
Policy
The introduction or Preamble of a policy contains?
1) Introduction or Preamble (Coverage Summary or Declarations Page)
2) Insuring Agreements
3) Statutory Conditions/ Quebec General Conditions
4) Policy Conditions
5) Signature Clause
is used usually to insure large risk. One insurer, known as the lead company prepares the policy but one or more other insurers subscribe to it or participate in covering that risk. Coverage may be evenly divided or could be in varying percentages of the total.
Subscription policy
is one that is specifically designed for a particular risk. It still must incorporate all elements of a normal policy.
Manuscript policies
If a policy differs from the written application, the insurance acts require?
1) Insurer must notify the insured of the difference
2) The notification must be in writing
3) If the insured does not object to this change within a certain time period, the policy is as written
Any writing on the back of a policy which varies the terms of the contract. In actual practice today an ____ is usually an attachment to the policy. An____ will overrule any wording in the policy itself which is inconsistent with the ___, unless an express stipulation to the contrary is embodied therein.
Endorsement
Endorsements:
M-modify
A-add
R-reduce
T- take away
This clause tells us that somebody other than the insured has a financial interest in the property insured.
Loss payable clause
Mortgagee is the?
Bank
Mortgagor is the?
insured person who has the mortgage
what are the four situations when a policy can be transferred?
B-Bankruptcy
O- operation of law
D- death
S-succession
Cancelation of a policy when the return premium paid is the full of proportionate part due for the unexpired term.
*the insurer is cancelling
Pro rata
applicable when the policy holder cancels before a policy reaches its natural expiration. The insurer pays a return premium less than the proportionate or pro rata part that is still unearned. The difference between the actual unearned portion of the premium and the amount refunded is used to defer administration expenses incurred in the early cancellations.
short rate or short date
the failure to disclose a material fact
nondisclosure or concealment
to treat a policy like it never existed
void
when can you void a policy?
if there is misrepresentation or concealment of a material fact.
in general terms, can be described as the expressed will of society governing relationships among members of that society.
law
a legal wrong
tort
a legal decision as an authoritative rule in future similar cases.
a precedent
statue law which is classified and arranged in a systematic collection or code. It is written law.
Codified law
an act of the legislature declaring, commanding or prohibiting something.
statue
What are the two classes of law?
1) Common law
2) Civil law/Private law
What are the two basic systems of law?
Civil code (Quebec) Common law (everywhere else)
defined as an agreement enforceable by law
contract
What are the 5 elements of a contract?
G- genuine intent L- legality of purpose A- agreement C- compacity to contract C- consideration
is that which one party gives or promises to give in exchange for the act or promise of the other, in other words, ___ is the price agreed upon.
Consideration
A ___ contract is one which never had any legal existence. It cannot be enforced.
void contract
one who can sue and be sued.
a legal person
occurs when the minor cannot financially afford the object of the contract even though the price is fair, or when the minor can afford it but the object is overvalued, or when he/she cannot afford an overvalued object. Th challenge can only be raised by the minor; it is binding on the other party, who cannot cancel at his own discretion. There are some instances where the minor cannot use this defense.
Lesion
legal guardians
tutors or curators
What are the3 Unique Elements of Insurance Contract
1) Insurable Interest
2) Indemnity
3) Utmost Good Faith
People have an ___ in property when they stand in such a legal relationship to it that they may be financially prejudiced by its loss or damage and may financially benefit by its continued existence
insurable interest
the replacement value of the property less any accumulated depreciation.
Actual cash value
What are the 3 properties of indemnity?
1) Salvage
2) Subrogation
3) Contribution
Property saved from loss(n)
is also used as a verb indicating the process of taking steps to reduce the amount of a loss.
Salvage
is the legal process by which an insurer who has paid a loss pursues any rights of recovery against a responsible third party.
Subrigation
sharing of loss or liability between two or more insurance companies covering the same risk.
Contribution
is a contract that insures property for an amount which agreed to by the insurer and the insured at the time the contract is made. It states that in the event of a total loss a specified amount will be paid to the insured.
valued contract
is a fact that would, if known, affect the minds of reasonable, prudent and experienced insurers in deciding:
- the acceptability if the risk
- the amount of premium to be charged
- the conditions applicable to accepting the risk
material fact
is the immediate and effective cause of the loss, not necessarily the last event before the occurrence, which in a chain of circumstances leads naturally and directly in the ordinary course of events to the loss.
proximate cause
The last link in the chain is known as the immediate cause.
Immediate Cause
A cause which is not a proximate cause is known as a remote cause.
Remote Cause
