Chapter 4 Flashcards
Define Insurable Interest?
Financial relationship with recognised law, between the insured and the subject-matter of insurance,
What are the three features of insurable interest?
Subject-matter
Legal relationship
Financial Value
What two ways us “subject-matter” used?
of insurance (the item/insured)
of the contract
Why would an insurer have to have insurers’ insurable interest?
To re-insure - they must have an insurable interest.
What does “MIA 1906” mean?
Marine Insurance Act 1906
In marine insurance does there need to be an insurable interest at the time of inception or claim?
Claim/Loss
What did the Marine Insurance (Gambling Policies) Act 1909 make a criminal offence?
To effect a marine policy where either there is no insurable interest in or no reasonable expectation that there will be one.
This is no longer the case
Which act made the following a criminal offence - To effect a marine policy where either there is no insurance interest or no reasonable expectation that there will be one?
Marine Insurance (Gambling Policies) Act 1909
What were you able to insure prior to the Life Assurance Act 1774?
Being able to insure someone’s life as a wager by a disinterested party.
Does there need to be insurable interest at inception of a life insurance policy?
It is not a straighforward area of law. There is generally no absolute requirement for actual insurable interest at inception.
What act made all contracts of gambling or wagering null and void?
Gaming Act 1845
When does there need to be an insurable interest on a life insurance policy?
Must exist at inception but need not exist at the time of a loss.
When does there need to be an insurable interest on a Marine Insurance Contract? and what is the caveat to this?
Must exist at the time of a loss but need not exist at inception, provided that there is a reasonable expectation of interest.
When does there need to be an insurable interest on a General Insurance Contract?
A general rule that insurable interest must exist both at inception and at the time of a loss, though some connection other than a full insurable interest may be sufficient at inception.
As a general rule, when must insurable interest first exist in order for a private motor insurance policy to be enforceable at law?
At inception of the policy.
Insurable interest in the subject-matter of an insurance policy may arise under what three ways?
Common law
Contract
Statute
How does common law create insurable interest?
We all have duties to each other and certain rights under common law which give rise to insurable interest.
Example - if we own something or injury someone through our negligence.
How does a contract give rise to insurable interest?
Where we have accepted liability’s greater than through common law through a contract.
EG. a landlord is liable for maintained of there property but they may make the tenant liable under the terms of a lease.
What is Statute?
A written law passed by a legislative body or a rule of an organisation or legislative body.
What insurable interest does a part or joint owner of a property have?
Insurable interest up to the limit of there financial interest in a property - they may be considered a trustee and be able to insure the full value of a property though.
What insurable interest does a Agent have in a property?
An agent has no direct insurable interest however where a principle has insurable interest the agent can insure on their behalf
What is a Bailee?
a person or party to whom goods are delivered for a purpose, such as custody or repair, without transfer of ownership.
What insurable interest does a Bailee have on property?
If it is damaged or stolen they may have to replace it. Examples of bailees include shoe repairers, garage owners and dry cleaners
What insurable interest do tenants have on a property?
In the event of damage to the property, the tenant may be liable for the cost of repairs
