Insurance

Question 1

What is an insurance Contract?

Answer 1

A contract by which one party, the insurer, in consideration of a sum of money called the premium, undertakes to pay to another person called the insured, a sum of money, or its equivalent, on the happening of a specified event

Question 2

What constitutes the formal offer in terms of insurance contracts?

Answer 2

A completed proposal form will form the offer of contract

Question 3

What is a cover note?

Answer 3

A cover note is an interim assurance that whilst negotiations are underway, the items under negotiation will be insured

Question 4

What act covers insurance contracts mostly?

Answer 4

Insurance Contracts Act 1984 (Cth)

Question 5

What is the basis for commonwealth jurisdiction in insurance law?

Answer 5

The constitution gives basis for the Commonwealth jurisdiction

Question 6

What is an insurable interest?

Answer 6

An insurable interest is a legal or equitable interest in the subject matter of insurance. It is a common law principle that all insured have a insurable interest in the subject matter

Question 7

The proposer does what?

Answer 7

Goes to the insurer, fills out a series of questions intended to provide sufficient information to enable the insurer to assess the nature of the risk

Question 8

The policy is a copy of the tax invoice, True or False?

Answer 8

False, the policy embodies the terms and conditions of the contract as agreed upon by the insured and the insurer.

Question 9

Define a Policy in a short sentence

Answer 9

The Policy is the formal statement of the terms and conditions of the insurance contract between the parties

Question 10

What Act covers insurance law in general terms?

Answer 10

Insurance Contracts Act 1984 (Cth)

Question 11

What is the duty of good faith?

Answer 11

Duty of good faith refers to the common law principle that contracts of insurance are made in the utmost of good faith. In essence, there is a implied term in every insurance contract that requires each party to act in good faith towards the other in respect of any matter arising under the contract

Question 12

What does s54(1) relate to? Insurance Contracts Act

Answer 12

Situations where the insurer may not refuse to pay claims in certain situations ie omissions after the contract which did not cause the event

Question 13

Does s54(1) apply to professional indemnity insurance contracts?

Answer 13

Yes, see East End Real Estate Pty Ltd t/as City Living v CE Health Casualty and General Insurance Ltd (1991) 25 NSWLR 400

Question 14

What is the section and provision which relates to unusual clauses in insurance contracts?

Answer 14

s37 and unless the insurer notifies the insured of the unusual term, they may not rely on the term during a claim process

Question 15

What is the status of fraudulent insurance claims at common law?

Answer 15

At common law, due to insurance contracts being of the utmost good faith, the insurer, on the notification of a fraudulent claim may avoid the whole contract.

Question 16

In terms of Insurance Contracts, are arbitration clauses valid before a dispute occurs?

Answer 16

no, they are only valid if made after the dispute occurs, s43

Question 17

How many days is to be given re the renewal of an insurance contract?

Answer 17

14 days is required under s58

Question 18

In the occurrence of double policies, can the insured claim total claims from both insurers?

Answer 18

No, they can only claim upto the value of the insured item and CANNOT make a profit on the loss of an insured object

Question 19

What is the doctrine of subrogation?

Answer 19

Subrogation is where once a claim is paid in a contract of indemnity, any rights that were conferred on the insured are now transferred to the insurer.

Can only be actioned where the insured has not started their own claims. Ie the other party cannot be sued twice for the same insured event

Question 20

A broker works for the insurer? True or False?

Answer 20

False, the broker works for the to-be-insured party in gaining a contract.

An insurance agent works on behalf of the insurer.