Chapter 5- Insurance Contract Formation And Insurable Interest Flashcards
When will And insurance contract come into existence
Well the offer made by one party is on conditionally excepted by the other
If The insured does not receive the renewal notice can I accept the offer of temporary cover which it contains
No
If the insured just received the renewal notice how is it deemed
But they have accepted the offer if they simply continue to use the car on the road
Insurance what three things that the parties have reached agreement on
The subject matter of the risk
The duration of the contract
The amount of the premium
What happens when insurance contract is renewed
A fresh contract is formed normally on the same basis as the old one
At renewal is offer and acceptance required
Yes the renewal notice which insurer issues can be regarded as an offer which the insured can accept by payment of the premium
The risk may fail to run resulting in a total failure of consideration for what four reasons
The proposal may be withdrawn at the premium has been paid
The policy may be polite mistake because there is no consensus ad idem
The policy may be void because no insurable interest
The policy may have be avoided ab initio
In all these cases they must allow a full return of premium unless there has been fraud
What insurance contracts that must be in writing
Marine insurance act
What insurance contracts need to be evidenced in writing
Contracts of guarantee
What insurance contract is written documentation required
Motor insurance (certificate of insurance)
Is an insurer who grants cover to a minor fully liable to meet all valid claims
Yes, but an insurer can’t enforce an insurance contract against a minor by suing them for the premiums owed unless it’s a contest for necessaries (motor insurance)
What is 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 are the key elements of insurance interest
The subject matter of insurance
Economic/ financial interest
Current interest
Legal interest
Why does the law require insurable interest
To reduce moral hazard
To discourage wagering
What two ways can creating of insurable interest arise
Under common law- where insurance interest if automatically presume to exist
Under contract- where a person will agree to accept responsibility for something for which they wouldn’t be originally liable (landlord/ tenant)