Chapter 3 Flashcards
Valid Contract
offer and acceptance + consideration
Unconditional and Conditional Acceptance
Conditional - meaning new terms are including into the offer
Postal Acceptance
Acceptance is complete at the point of postage - even if it is lost.
Consideration
right, interest or profit benefiting one party e.g. payment
Policy Renewal
Should be offered in good time. FCA have changed the rules around disclosing premium and encouraging customers to check their payments and consider if there are cheaper alternatives.
Insurers Rights
They have a right to cancel a policy if they give notice and if the insured has acted inappropriately. Premium must be returned pro rata
Policyholder’s rights
They can cancel if bought on the phone or online or with 30 days notice of the policy starting
Fulfilment
If the car was to burn down and not exist anymore
Voidable contracts
The insured is in breach of a policy condition
Breach of Warranty
Departure from exact requirements warrants a breach. Change of legislation means that if there is a breach of warranty the policy can be put on hold till this is rectified and then reinstated. Rather than cancelled.
Fraudulent Acts
The insurer does not have to pay the claim, can cancel the policy and recover any amount already paid for the claims.
Agency by Necessity
A person is entrusted with someone else’s goods and it becomes necessary to act in a certain way in order to preserve the property in an emergency
Agency by Ratification
Where an agent acts without authority, but the principle accepts he act as have being done on their behalf.
Agent of the insured
Giving advise on cover or how to make a claim
Agent of insurer
Authorised to handle proposal forms, surveys, collect premiums or pay claims
Duties of an Agent
Obedience, Personal performance, Due care and skill, Good Faith, Accountability
Duties of a principle
Remuneration, indemnity against all losses or expenses when acting on behalf of the principle
Actual Authority
Usually stated within the TOBA
Apparent Authority
If an agent has not been appointed then there is not a binding contract with the principal.
TOBA
Terms of business agreement - should be clear succinct, reflect the business relationship, define roles and responsibilities and ensure compliance.
