Chapter 8- Makinf The Claim

Question 1

What fundamental change has the contracts rights of third parties act 1999 brought about

Answer 1

It provides a third-party can import contractual term if

The contract provided they may do so
The contract purports to confer a benefit on a third party

Question 2

Sometimes a person who insures is deemed to have established a trust for the benefit of a third-party what sort of insurance as it frequently arise with

Answer 2

Life insurance where a person insures their own life but does so expressly for the benefit of another

Question 3

What two distinct advantages are there in the trust can be established

Answer 3

On the death of the insured the policy money goes directly to the beneficiary and is not counted as part of the insureds estate

If the insured becomes bankrupt the beneficiary can usually claim the policy number without being subject to the claims of insureds creditors

Question 4

What Four ways can there be a number of statutory exceptions to the doctrine of privity of contract

Answer 4

Road traffic act
Third parties act
Law of property act
Fires prevention act

Question 5

Motor insurance policies are different why

Answer 5

Because they often cover person is open and the policyholder including various named drivers or any person who drives insured vehicle without the policyholders permission

Question 6

Under the Road traffic act is a requirement in insurable interest there

Answer 6

A policyholder can claim an indemnity on behalf of any additional drivers and the requirement to be sure that interest is deemed to be waived

Question 7

What is the effect of The doctrine of privity of contract under the Road traffic act

Answer 7

The effect is to allow persons open than the policyholder to enforce the policy directly although they were not party see original contract

Question 8

What is another exception to the doctrine of privity of contract under the Road traffic act

Answer 8

It allows the victim of a road accident to make a direct claim against the motor insurer of a negligent driver who caused the accident

Question 9

Under the Road traffic act what two ways are there the right to make a direct claim under section 151 of the doctrine of privity act

Answer 9

The accident victim had obtained a judgement against a negligent driver

The driver has failed to satisfy the judgement within seven days

Question 10

Under the third parties act privity to the contract what happens

Answer 10

The rights of an insolvent insured to an indemnity from the insurers under a liability policy were transferred to a third party claimant

Question 11

What is the doctrine of privity under the third parties act

Answer 11

It’s allowed the victim to bring a claim directly against liability insurers for passing the insured and insured of a creditors should they become insolvent

Question 12

Under the doctrine of privity of contract what is the law of property act

Answer 12

The benefit of any insurance affected by the vendor of houses is automatically assigned to the purchaser if at exchange of contracts the property is damaged

Question 13

What happens with policies with additional insureds?

Answer 13

Insurance policies particularly liability insurance often grant an indemnity to persons other than the main insured what is usually a company

Question 14

What is the burden of proof

Answer 14

The policy may state that the insured must give full particulars of the loss or Provide such proofs and information as my reason to be required

Question 15

Who does the burden of proving for loss remain with

Answer 15

The insured and it is obviously in their best interest to complete the claim form to provide as much information and cooperate with insurers in investigation of a loss

Question 16

To discharge the burden of proof insured must be able to establish two things

Answer 16

But the loss was caused by an operation of an insured peril

The amount of the loss

Question 17

What must be established by the burden of proof

Answer 17

It must be established by the insured on the balance of probabilities

Question 18

What does it mean when it says the loss must be fortuitous

Answer 18

The loss must not be caused deliberately by the insured or brought about by the insureds own wilful misconduct

Question 19

Under composite insurance does wilful misconduct by one coinsured prejudice the other

Answer 19

No they don’t usually prejudice the right to claim of an innocent coinsured

Question 20

What an claim deliberately/ intentionally caused by a member of the insureds family or their employees be covered

Answer 20

Yes as long as the insured had no involvement in their actions

Question 21

What is a reasonable precautions clause

Answer 21

Where insurers seek to avoid liability for losses caused by excessive carelessness

Question 22

What is this an example of

You must take all reasonable care to protect the property Insured prevent loss or damage and prevent accident or injury

Answer 22

A reasonable precaution

Question 23

What is it an example of

The insured shall take all reasonable steps just get safeguard from loss or damage and maintain in efficient condition any motorcar for which indemnity is granted

Answer 23

Reasonable precaution

Question 24

Do English courts like the reasonable precaution clause

Answer 24

No they are rather reluctant to enforce conditions of this sort

Question 25

What happens reasonable precautions clauses on the liability insurances

Answer 25

I have generally been in forced only in the case of reckless conduct by the insured. Where conduct where the insured is not merely careless but deliberately takes an orbit and unjustified risk. It seems that the courts now take a similar attitude with property insurance claims

Question 26

Where does the burden of proof for the reasonable precautions clause lie

Answer 26

The burden of proof rests on the insurer for reasonable precautions

Question 27

The claims handling rules under ICOBS require insurers to do what

Answer 27

Handle claims promptly and fairly
Provide reasonable guidance to help someone make a claim
Not unreasonably reject the claim
Settle claims probably want to settlement has been agreed

Question 28

Under the insurance act and the enterprise act what law reform came in for damages for late claim payments

Answer 28

It made it an implied term under the insurance contract that the insurer must pay any sums due in respect of a claim within a reasonable time

Question 29

What happens if an insurer doesn’t pay a claim within a reasonable time

Answer 29

It’s It will result in contractual damages in addition to the sums due under the policy and any interest on those sums

Question 30

What are the two problems in relation to causation

Answer 30

It can be difficult to separate the effects of a peril which is insured

The operation of a panel that is insured may result in a damage of a different sort

Question 31

Why is an all risks policy different

Answer 31

Any peril that is not specifically excluded is automatically an insured peril and there is no third class of insured peril

Question 32

In looking for the proximate cause insurance law has traditionally assumed that

Answer 32

It can be identified as the most powerful in bringing about the loss

Question 33

Who must proximate cause be understood by

Answer 33

Understood by the man in the street

Question 34

What happens in a chain of events when the loss flows in an unbroken chain directly from an insured peril

Answer 34

Insurers are liable

Question 35

What happens in a chain of events where The lost flows directly from an excluded peril

Answer 35

There is no liability for loss

Question 36

Why have the English court refused to allow recovery for mere prevention costs (not damage to subject matter itself but expense incurred to prevent damage because the subject matter)

Answer 36

Because it is not an implied term that the insurer would indemnify the insured expenses incurred to prevent a loss

Question 37

What policies contain a sue and labour clause which in total is insured to claim expenses incurred to prevent or minimise insured losses

Answer 37

Marine insurance

Question 38

Who is the burden of proof on to prove that an insured peril was approximate cause of a loss

Answer 38

The insured

Question 39

What does this relate to

In the case of fire insurance the insured was proof that the property has been burned or in the case of theft insurance that it has been stolen stolen

Answer 39

The burden of proof

Question 40

What happened to the burden of proof when insurance is written on an all risks basis

Answer 40

The insured does not have to prove the operation of any specific peril And need to only prove that the loss was accidental

Question 41

What happens when the insured has established the burden of proof

Answer 41

It now shifts to the insurer. If they wish to reject the claim they must prove that an excepted peril was approximate cause. They may also shift the burden of proof by requiring the insured to prove that the loss was not caused by an excepted peril

Question 42

What is the standard of proof in the case of insured or excepted perils

Answer 42

The proof on a balance of probabilities

Question 43

What are the four types of fraudulent claims

Answer 43

Falsification of a loss i.e. the insured make the claim when They haven’t suffered a loss

Deliberate loss i.e. when They deliberately cause a loss

Exaggeration of a loss i.e. when They exaggerate the amount of a loss

Lying about the circumstances of a genuine loss to improve the chances of a claim being paid (also known as fraudulent device)

Question 44

What does the fraud act determine that a person is guilty of a criminal offence of fraud if they do what

Answer 44

Dishonestly make a false representation

Dishonestly failed to disclose to another person information which he or she is enjoy duty to disclose

Dishonestly abused their position

Question 45

For criminal prosecution of fraud to succeed what must the prosecuting body determine

Answer 45

It will need to meet the criminal standard of proof i.e. the case beyond a reasonable doubt

Question 46

For a civil prosecution what most insurers do to prove a fraudulent claim

Answer 46

Need to meet the civil standard of proof which requires that they establish that the person committed fraud on the balance of probabilities

Question 47

What is a fraudulent device

Answer 47

It refers to Fraudulent statements that are designed to increase the likelihood of a claim being paid out

Question 48

What happens if there is a fraudulent device

Answer 48

If the fraud is established the insured would forfeit their claim

Question 49

What happens if the insured makes a fraudulent claim

Answer 49

The insurer is not liable to pay the claim. It can recover any sums paid in respect of a claim And could treat the contract has been terminated with effect on the time of the fraudulent act

Question 50

Even insurer terminate the contract because of a fraudulent claim do they have to return any premiums paid

Answer 50

No and it can also refuse to pay any claims arising after the time of fraudulent act

Question 51

What happens in a case of group insurance for example employers liability when one person makes a fraudulent claim

Answer 51

This does not have an affect on other employees who are insured under the same policy and whose claims were not fraudulent

Question 52

What happens for personal injury claims where a part of a claim is found to be fundamentally dishonest

Answer 52

The entire claim should be struck out by the court

Question 53

What happens under the proceeds of crime act 2002 when somebody has committed fraud

Answer 53

Where somebody has committed fraud has been convicted, a confiscation order can be made to recover the assets that have been fraudulently obtained an insurer which is paid out of fraudulent claim may be able to recover their money