Consideration Flashcards
What is “Consideration” defined as in terms of insurance?
“some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility given, suffered or undertaken by the other”
When will a valid contract be prepared by the insurer?
Once an offer has been accepted, the risk may not attach immediately.
What does English Law state?
A promise to pay is as good consideration as payment itself. However, insurers may stipulate that the risk will not run until the premium is paid.
In Malaysia, where does “cash-before-cover” apply and explain how?
Applies to:
MOTOR INSURANCE,
INDIVIDUAL TRAVEL, AND PERSONAL ACCIDENT INSURANCE.
The ruling requires actual payment of the premium to complete the insurer’s contract and assumptions of risk.
In Malaysia, how does “cash-before-cover” apply to MARINE INSURANCE?
Insurer often agrees in advance to extend the policy to cover some risks excluded from the original contract if the need arise, with an additional premium to be fixed afterward.
