Chapter 10 - New Questions Flashcards
In which situation would a life insurance company have no subrogation rights?
When the policyholder’s death is caused by a third party’s negligence.
Under what circumstance can an insurer claim money from a gift received by the insured after suffering a loss?
When the gift was intended for the sole benefit of the insured and not related to the insurance claim.
What happens if an insured does not allow the insurer to use their name in an action against a third party?
The insurer can sue the insured and the third party in the same action.
According to the principle of subrogation, how many times can a person sue for a wrongful act that has been committed against them?
Only once for the whole loss.
Why might insurers include a ‘duty of assured’ clause in a policy?
To prevent the insured from prejudicing the insurer’s subrogation rights.
What happens if the recovery from a third party exceeds the amount of the loss suffered by the insured?
The insured is entitled to keep the surplus after the insurer has been paid back.
What is a key difference between subrogation and assignment in the context of insurance claims?
Subrogation occurs automatically, while assignment requires an agreement.
In the case of Napier v. Hunter (1993), what was the court’s decision regarding recovery when the insurer has paid less than the full loss?
The insurer can keep the entire recovery even if it does not cover the full loss.
In North of England Iron Steamship Insurance Association v. Armstrong (1969–70), why did the court rule that the insurer could keep the entire recovery amount?
The insured’s valuation of the ship was deemed irrelevant to the case.
Which branch of law most frequently gives rise to subrogation rights?
Tort law
In the context of subrogation, what is an example of a tort other than negligence?
Nuisance
In the case of subrogation involving indemnity clauses, what type of agreements are typically involved?
Knock for knock agreements
In Lister v. Romford Ice and Cold Storage Ltd (1957), what unusual aspect of subrogation was highlighted?
The case involved a unique contract-based subrogation scenario
What is a primary difference between subrogation and abandonment/salvage rights?
Subrogation allows recovery for the insurer’s payment, while abandonment/salvage rights give rights over the subject matter itself.
In which situation can subrogation not be exercised by the insurer in their own name?
Generally, except in one specific exception
Which of the following is a common market agreement that affects subrogation rights?
‘Knock-for-knock’ agreements
In the case of Lister v. Romford Ice and Cold Storage Ltd (1957), what was a significant outcome regarding subrogation rights?
The court allowed the insurer to pursue subrogation against the negligent employee.
Under what condition might a court assume that subrogation rights are barred due to a business contract?
If the contract states that property is ‘at the sole risk of’ one party.
Under what condition is subrogation against a co-insured usually denied?
When the insurer has indemnified the co-insured for the loss
When might subrogation against a co-insured be allowed?
When the co-insured ceases to be covered by the insurance
Which case illustrates the principle that subrogation rights may be denied on public policy grounds to avoid harming industrial relations?
Morris v. Ford Motor Co.
What must be true about the subject matter of the insurance policies for contribution to be applicable?
The policies must be issued by the same insurer.
What does not constitute double insurance that would lead to contribution?
Two policies covering different risks for the same property.
What effect does a contribution condition in an insurance policy have?
It changes or overrides the common law rules of contribution.
In the case of Gale v. Motor Union Insurance Co. (1928), what was the court’s decision regarding the non-contribution clauses in the policies?
The court decided that the loss should be shared equally between the two insurers.
What does a typical excess of loss clause state regarding additional insurance coverage?
The policy will cover any loss that exceeds the amount covered by the primary insurance.
In the case where both insurance policies have similar excess of loss clauses, what is the likely outcome?
The clauses will cancel each other out, leaving no coverage.
What is a key limitation of the maximum liability method?
It does not account for different ranges of coverage between policies.
Which method is more commonly used in practice for calculating contribution in double insurance cases?
Market practice often overrides the methods.
In property insurance where policies are not subject to average and the property covered is identical, which method is typically used for calculating contribution?
Maximum liability method
If two property policies are not concurrent and the subject matter of insurance is not identical, what method is often used for calculating contribution?
Mean method
In which type of market agreement might insurers agree to share losses even if, according to legal principles, contribution does not arise?
Claims sharing agreement
Which type of market agreement involves waiving rights of contribution so that the whole loss is borne by one insurer?
Waiver of contribution rights
In the motor insurance market, which agreement specifies that the insurers of the vehicle involved in an accident will not seek contribution from the driver’s own insurers?
Waiver of contribution rights
