Chapter 2 Flashcards
two most important elements of a contract
offer and acceptance
consideration
what is meeting of the minds
do the two parties know they are agreeing to the same thing
is a contract is missing any essentials, what is it considered
void ab initio
generally, when is a contract made
when the acceptance is received by the offerer
when is acceptance considered when its been made in the post
when the letter is posted
definition of insurable interest
the legal right to insure, arising out of a financial relationship, recognised at law, between the insured and the subject matter of insurance
what info does the insured not need to disclose
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
when it deemed as though an insurer has waived there rights
they are only given partial info but dont ask further questions
what is known as a slip
market reform contract
who does the market reform contract and whats on it
the broker, includes risk details for insurers consideration
what is estoppal
essentially when the insured relies on silence from the insurer as evidence of being satisfactory
what needs to be done by insurer if they wont be renewing insurance
giver the insured good time to get new insurance
who can usually cancel a policy
insurer, not insured
three types of perils
insured
excluded or excepted
uninsured or unnamed
are a peril is not mentioned at all, will it be covered
yes
what is indemnity
the concept of putting the insured in the position they were in before the loss occurred
when does indemnity not apply
personal accident, price cant be put on a limb lost
4 types of indemnity settlement options
cash
repair
reinstatement ( restore )
replacement
formula for claim payment
sum insured / value of all goods at risk x loss
what is an excess
an amount that is deducted from each claim and is paid by the insured
what does average refer to in non marine insurance
underinsurance
what does average refer to in marine insurance
a loss
what is contribution
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
5 requirements before contribution arises
common subject matter common perils common insurable interest no non contribution clause both policies are liable for the loss
