Chapter 2

Question 1

two most important elements of a contract

Answer 1

offer and acceptance

consideration

Question 2

what is meeting of the minds

Answer 2

do the two parties know they are agreeing to the same thing

Question 3

is a contract is missing any essentials, what is it considered

Answer 3

void ab initio

Question 4

generally, when is a contract made

Answer 4

when the acceptance is received by the offerer

Question 5

when is acceptance considered when its been made in the post

Answer 5

when the letter is posted

Question 6

definition of insurable interest

Answer 6

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

Question 7

what info does the insured not need to disclose

Answer 7

information that lessens the risk 
that the insurer knows 
that the insurer ought to know 
what the insurer is presumed to know 
waived by insurers
matters of the law 
public knowledge like a war

Question 8

when it deemed as though an insurer has waived there rights

Answer 8

they are only given partial info but dont ask further questions

Question 9

what is known as a slip

Answer 9

market reform contract

Question 10

who does the market reform contract and whats on it

Answer 10

the broker, includes risk details for insurers consideration

Question 11

what is estoppal

Answer 11

essentially when the insured relies on silence from the insurer as evidence of being satisfactory

Question 12

what needs to be done by insurer if they wont be renewing insurance

Answer 12

giver the insured good time to get new insurance

Question 13

who can usually cancel a policy

Answer 13

insurer, not insured

Question 14

three types of perils

Answer 14

insured
excluded or excepted
uninsured or unnamed

Question 15

are a peril is not mentioned at all, will it be covered

Answer 15

yes

Question 16

what is indemnity

Answer 16

the concept of putting the insured in the position they were in before the loss occurred

Question 17

when does indemnity not apply

Answer 17

personal accident, price cant be put on a limb lost

Question 18

4 types of indemnity settlement options

Answer 18

cash
repair
reinstatement ( restore )
replacement

Question 19

formula for claim payment

Answer 19

sum insured / value of all goods at risk x loss

Question 20

what is an excess

Answer 20

an amount that is deducted from each claim and is paid by the insured

Question 21

what does average refer to in non marine insurance

Answer 21

underinsurance

Question 22

what does average refer to in marine insurance

Answer 22

a loss

Question 23

what is contribution

Answer 23

the right of an insurer to call upon others similarly, but not necessarily equally, liable to the same insured to share the cost of an indemnity payment

Question 24

5 requirements before contribution arises

Answer 24

common subject matter
common perils
common insurable interest
no non contribution clause
both policies are liable for the loss

Question 25

two ways to determine rateable proportion

Answer 25

sum insured

independant liability method

Question 26

sum insured formula

Answer 26

policy sum insured / total sums insured x loss

Question 27

independant liability formula

Answer 27

independant liability/ total independant liabilities x loss

Question 28

what is subrogation

Answer 28

the right of an insurer following payment of a claim, to take over the insureds rights to recover payment from a third party responsible for the loss

Question 29

how many days have you got to claim against the police in the riot compensation act

Answer 29

43 days