Chapter 1 Flashcards
What is Onus of proof
Insured responsibility to prove they have a valid claim
What two things does the insured need to prove when making a claim?
1 - That an insured peril arose
2- The amount of loss
With Liability claims do you need to prove a valid claim?
Yes
What is an Express Condition
It is a condition stated in the policy
What is an implied condition
It is one that is accepted as applying to the policy, but is not actually stated in it
What are the conditions precedent to the contract?
Must be met before the insurance contract becomes effective. For example a condition might require an individual to disclose all relevant medical information before an insurance contract is signed. If disclosure is not made the contract may be void.
What are the conditions subsequent to the contract?
They are conditions that must be met after the contract has taken effect for example a PH may need to maintain property and fails to do so could lead to the cancellation of policy
What are the conditions precedent to liability (recovery)
These must be met in order for the insurer to be liable for the claim.
What happens if the conditions precedent to liability (or recovery) are not met?
Insurers may avoid liability for a particular loss, but they need not repudiate the contract as a whole
What does ICOBS State?
Unless fraud is involved, the insurer should not refuse to pay a claim from a consumer on the grounds that a condition was not met, where that condition was not connected with the circumstances of the loss.
Policy conditions that may be partially met
Sum Insured (property insurance)
Limits of Liability (liability insurance)
This forms part of the policy and limits the maximum amount recoverable. Claims for losses above this amount will not be met in full.
Example - home owner insured property for £200,000 but was a total loss and rebuild cost was £250,000 the insurer will only pay up to the £200,000 policy limit leaving PH to cover the difference.
Another policy condition that may be only partially met
Average Clause
In the case of under-insurance for property insurances: the amount paid will be reduced in proportion of the amount of under insurance
For example - property worth £200,000 is insured for £100,000 then he is underinsured
If a total loss occurs we would only cover half the value as he only insurance 50%
Would would be 200,000 - 50% = 100,000
If he has an average clause then we would sum of insured / value of goods at risk x loss to get an average
What is a voluntary or compulsory excess or deductible ?
An excess is the amount the PH agrees to pay towards the claim
What are implied duties?
They are imposed by common law, whether or not they are found in the policy wording.
Example the law requires you to take necessary steps to prevent a loss from spreading or a roof from leaking
Failure to comply with these conditions could render the claim invalid
What are Express duties?
They are always written into the contract and usually found as conditions in their policy.
There is always a condition setting out the insureds duties in the event of an insured event occurring they are often entitled claims procedure or action by the insured
Example would be notifying the insurer promptly when an event happens and you need to claim
