Chapter 4 Flashcards
Insurable interest
legal right to insure arising out of a financial relationship recognised at law, between the insured and subject matter of insurance. Subject Matter, Legal Relationship and Financial Value
Legal Relationship
If there is no legal relationship there is no insurable interest
Financial Value
Insurable interest must have a financial value
General Insurance
The insurable asset must exist at the time of policy inception
Life Insurance
The insurable asset should exist at inception, but not necessarily at the time of loss
Marine
Does not need to exist at the time of inception
Common Law
Ownership
Contract Law
Give additional liabilities than imposed by common law
Statue Law
Tenants responsible for the upkeep of a building
Property Insurance
Arises out of ownership - but there can be instances of joint-ownership
Liability Insurance
The extent of any potential legal liability that they may incur to pay damages awarded by a court. A person might be liable for an accident they caused.
Joint or part owners
Has insurable interest up to the limit of their financial interest
Agents
Where a principle has insurable interest, their agent can insure on their behalf
Bailees
Hold property on a temporary basis
Tenants
May be responsible for the cost of repairs
