Ch :4 Insurable Interest

Question 1

What is insurable interest

Answer 1

It is a legal right to insure arising out of a financial relationship recognised at law between the insured and the subject-matter of insurance.

Question 2

Features of insurable interest

Answer 2

-subject matter
-legal relationship
-financial value

Question 3

Subject matter used in 2 ways

Answer 3

1.Subject matter of the insurance
2.Subject matter of the contract

Question 4

Example of legal relationship

Answer 4

Ownership

Question 5

Codifying Act (bringing together and updating all previous legislation on the subject )

Answer 5

Marine insurance Act 1906 (MIA 1906)

Question 6

Which class of insurance is considered void in the absence of insurable interest at the time of any loss.

Answer 6

Marine Insurance contract

Question 7

Which act made it a criminal offence to effect if there is no insurable interest or there is no reasonable expectation of such an interest

Answer 7

The Marine Insurance (Gambling Policies ) Act 1909

Question 8

General insurance contracts

Answer 8

Are contracts of indemnity

Question 9

Advice insurable interest existence in life ,marine or general insurance contracts.

Answer 9

Life insurance contracts: insurable interest must exist at in inception but need not exist at the time of a loss.

Marine insurance contracts : insurable interest must exist at the time of loss but need not exist at inception ,provided that there is reasonable expectation of interest .

General insurance contracts : A general rule that insurable interest must exist both at inception and at the time of a loss.

Question 10

When must insurable interest 1st exist in order for a pvt motor insurance policy to be enforceable at law.

Answer 10

At inception of the policy

Question 11

Who are bailee

Answer 11

Someone holds property on a temporary basis on behalf of a legal owner is called as bailee.

Question 12

Insurable interest can be created by

Answer 12

Ownership ,contract and legislation

Question 13

What does a tenant have insurable interest in the property they live in

Answer 13

They may be liable for the cost of repairs

Question 14

Tony Is effecting an insurance policy on behalf of another party .Tony is not the owner of the property but he is able to arrange insurance because he is an

Answer 14

Agent of the other party

Question 15

A dry cleaner has an insurable interest in the garments they clean and is therefore referred as

Answer 15

Bailee

Question 16

If an insurance Co wants to reinsure part of a risk they hold their financial interests in the original insurance is known as

Answer 16

Subject matter of the contract

Question 17

Insurable interest can arise at

Answer 17

-common law
-under contract
-under statute

Question 18

Insurable interest of a shareholder in a limited co is limited to

Answer 18

the value of the shares that they own

Question 19

At common law a person’s insurable interest in their potential legal liabilities includes

Answer 19

the claimants damages and legal costs

Question 20

Which principle concerning insurable interest under a general non marine contract of insurance is illustrated by the case of lucena v crauford (1806)

Answer 20

The expectation of acquiring insurable interest at some time in the future (however certain) may not be enough to create insurable interest

Question 21

A requirement of the life assurance act 1774 for a life insurance policy to be valid

Answer 21

The name of the person effecting the policy must be shown

Question 22

A tenant is most likely to have an insurable interest in the property they rent

Answer 22

Under contract

Question 23

Example of a statute restricting liability ans therefore insurable interest

Answer 23

The hotel proprietors act 1956

Question 24

Which statutes makes tenants responsible for the upkeep of the bldgs they occupy , giving them an insurable interest

Answer 24

The settled land act 1925

Question 25

Case of castellain v Preston (1883) laid down an important principle with regards to which of the features of insurable interest

Answer 25

The subject matter of the contract

Question 26

Rohan hits the back of Dia’s car which is stopped at traffic lights damaging the rear of dias car.Dia also suffer whiplash injuries.the requirement for roman to pay compensation for the injuries and damages caused is an example of insurableinterestarising out of

Answer 26

Common law

Question 27

The definition of insurable interest includes

Answer 27

A loss, damage and potential liability including costs

Question 28

Dia is unable to insure his brothers car because the principle of

Answer 28

Insurable interest

Question 29

Primary purpose of insurable interest is to

Answer 29

Avoid gambling and speculation

Question 30

If a tenant has a lease on the property he rents , making him responsible for insuring it even though he does not own it

Answer 30

The lease is an contractual agreement which would give insurable interest allowing him to insure the property

Question 31

Which insurance principle requires the proposer to have an financial interest in the subject of an insurance policy

Answer 31

Insurable interest

Question 32

When talking about the concept of insurable interest the term subject matter of insurance refers to the

Answer 32

Item or event insured

Question 33

Simon is purchasing a house and the terms of agreement require him to insure the property from exchange of contracts.wjat is the position in relation to principle of insurable interest

Answer 33

The contract creates insurable interest

Question 34

Which statutes make the tenants responsible for the upkeep of the building they occupy and gives the tenant an insurable interest

Answer 34

Settle land act 1925 and the repair of benefice building Measure Act 1972

Question 35

Which statutes restrict liability and therefore restrict insurable interest

Answer 35

Hotel proprietors act 1956 , Carriers Act 1830 , Trustee Act 1925 , Carriage of goods by sea Act 1971