Chapter 4 Flashcards
Nico buys a house for £200,000 with a mortgage of £150,000 from the Helpful Bank. What is the extent of the Helpful Bank’s insurable interest in Nico’s property?
£150,000.
Which statute makes tenants responsible for the upkeep of the buildings they occupy, giving them an insurable interest?
The Settled Land Act 1925.
Tamsin sells her car to her best friend Jeremy, but omits to cancel her insurance policy. Two weeks later the car is stolen and Tamsin decides to make a claim on her insurance policy. How much, if anything, will Tamsin receive from her insurers?
Nothing, as she no longer has insurable interest.
Which important principle concerning insurable interest under a general non-marine contract of insurance is illustrated by the case of Lucena v Craufurd [1806]?
The expectation of acquiring insurable interest at some time in the future (however certain) may not be enough to create insurable interest.
Raman hits the back of Hamish’s car which is stopped at traffic lights, damaging the rear of Hamish’s vehicle. Hamish also suffers whiplash injuries. The requirement for Raman to pay compensation to Hamish for the injuries and damage caused is an example of insurable interest arising out of:
common law.
A tenant is most likely to have an insurable interest in the property they rent:
under contract
The case of Castellain v Preston [1883] laid down an important principle with regard to which of the following features of insurable interest?
The subject-matter of the contract.
For life insurance contracts, insurable interest must exist:
at inception, but it does not need to exist at the time of a loss.
What is a requirement of the Life Assurance Act 1774 for a life insurance policy to be valid?
The name of the person effecting the policy must be shown.
What is a bailee?
Someone who holds property on a temporary basis on behalf of the legal owner.
What is the general rule regarding the existence of insurable interest in relation to general insurance contracts?
It must exist both at inception of the policy and at the time of a loss.
Insurable interest in the subject-matter of an insurance policy can be created in which of the following three ways?
Under common law, contract and statute.
As a general rule, if a general insurance contract is effected when there is NO insurable interest:
it is void ab initio [from the beginning].
Which statute makes tenants responsible for the upkeep of the buildings they occupy, giving them an insurable interest?
The Settled Land Act 1925.
The roof of Howard’s house is poorly maintained. A loose tile falls and hits Deepak on the head when he calls to read the gas meter. The injury caused to Deepak as a result of Howard’s negligence is an example of insurable interest arising under:
common law.
