Insurance Flashcards
What is an insurance Contract?
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
What constitutes the formal offer in terms of insurance contracts?
A completed proposal form will form the offer of contract
What is a cover note?
A cover note is an interim assurance that whilst negotiations are underway, the items under negotiation will be insured
What act covers insurance contracts mostly?
Insurance Contracts Act 1984 (Cth)
What is the basis for commonwealth jurisdiction in insurance law?
The constitution gives basis for the Commonwealth jurisdiction
What is an insurable interest?
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
The proposer does what?
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
The policy is a copy of the tax invoice, True or False?
False, the policy embodies the terms and conditions of the contract as agreed upon by the insured and the insurer.
Define a Policy in a short sentence
The Policy is the formal statement of the terms and conditions of the insurance contract between the parties
What Act covers insurance law in general terms?
Insurance Contracts Act 1984 (Cth)
What is the duty of good faith?
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
What does s54(1) relate to? Insurance Contracts Act
Situations where the insurer may not refuse to pay claims in certain situations ie omissions after the contract which did not cause the event
Does s54(1) apply to professional indemnity insurance contracts?
Yes, see East End Real Estate Pty Ltd t/as City Living v CE Health Casualty and General Insurance Ltd (1991) 25 NSWLR 400
What is the section and provision which relates to unusual clauses in insurance contracts?
s37 and unless the insurer notifies the insured of the unusual term, they may not rely on the term during a claim process
What is the status of fraudulent insurance claims at common law?
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.
In terms of Insurance Contracts, are arbitration clauses valid before a dispute occurs?
no, they are only valid if made after the dispute occurs, s43
How many days is to be given re the renewal of an insurance contract?
14 days is required under s58
In the occurrence of double policies, can the insured claim total claims from both insurers?
No, they can only claim upto the value of the insured item and CANNOT make a profit on the loss of an insured object
What is the doctrine of subrogation?
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
A broker works for the insurer? True or False?
False, the broker works for the to-be-insured party in gaining a contract.
An insurance agent works on behalf of the insurer.
