Insurance repetition

Question 1

Why is there insurance in commerce

Answer 1

because commerce is risk averse

Question 2

Do you not have insurance if you dont buy it

Answer 2

No, then you are self insured, you are your own assurer because you cover your own risk

Question 3

Insurances are based on public policy

Answer 3

No they are based on contract law

Question 4

Anyone can be an insurance underwriter

Answer 4

No, it is regulated and you need to be a licensed professional

Question 5

What is an ex gratia payment

Answer 5

Normally insurance companies are as stingy as they can be but if you are a big and valuable customer they may cover you partly even if the contract does not cover it to establish good will.

Question 6

What are some other words for insurer and insured

Answer 6

underwriter and assured

Question 7

Privity of contract is never a problem in insurance law especially in common law countries

Answer 7

False, normally third parties cannot sue based on a contract they are not included in although in insurance contracts for their sake such as trafic insurance they do gain that right as the intention to include them in the privity is implied

Question 8

What are the two types of insurance

Answer 8

indemnity and contingency insurance

Question 9

what is the insurance that covers your losses although often includees a maximum cap called

Answer 9

indemnity insurance

Question 10

What is the insurance where the underwriter pays you a specific sum called

Answer 10

contingency or non-indemnity insurance

Question 11

Most insurance companies are for profit

Answer 11

True although historically they have often gone bust

Question 12

Mutual insurance companies are for profit

Answer 12

False, they are a member support member scheme

Question 13

PRI clubs for shipping insurance is an example of Mutual insurance

Answer 13

True

Question 14

Consumer insurance has the same regulation as company insurance

Answer 14

False

Question 15

Explain the tiers insurance scheme

Answer 15

When the lower tier pays all up to an agreed sum were after a higher tier pays and so on. Top tiers are further removed form the risk and rarely pays.

Question 16

Explain retro insurance

Answer 16

When insurers lack the upfront ability to pay so they insure themselfves through reinsurers which are further insured and so on

Question 17

What can you not insure

Answer 17

Illegal activities and something something you dont have an insurable interest in (that wont hurt you if you lose it) like your neighbors house

Question 18

insurable interest defenition varries among nations but most agree that the contract has to be signed in utmost good faith

Answer 18

true for both civil and common law countries

Question 19

What is the right that lets an indemnity insurer that has payed in full gain all the rights associated to the assuerd object called

Answer 19

The right of subrogation

Question 20

If you sign an all risks included insurance contract you dont have to prove anything to get payed

Answer 20

Yes, that the damage was accidental or at least not your purposeful doing

Question 21

Explain a nominated perill insurance contract

Answer 21

You insure yourself against a specific thing and you have to prove that that thing was the dominant cause if your damages to gain compensation, the dominant cause may be caused many years ago like the example of the ww2 bomb exploding being caused by war 80 years ago

Question 22

The size of an indemnity is often decided by the present market value

Answer 22

True

Question 23

What is a value policy indemnity

Answer 23

When the value of an object is agreed beforehand in the contract which may consider the cost of replacement

Question 24

Subrogation only applies to indemnity insurance

Answer 24

True

Question 25

Is there a limit on value an insurance company can gain through the right of subrogation

Answer 25

Yes, they can only gain back as much as they have payed, excess of that will go to the assured. This can however be contracted out of

Question 26

What may cause insurance to be compulsory

Answer 26

Contracts like CIF, commercial norms like ports not letting in uninsured shipps as well as by law like trafic insurance which is mostly for third parties

Question 27

Underwriters may be discriminated against if they are seen as a third parties source of compensation

Answer 27

Yes, at lesast they cannot use the assureds conduct as an excues not to pay

Question 28

In the case of pollution insurance companies have no excuse to not pay except in the case of willful misconduct

Answer 28

True

Question 29

What is the pay 2b payed rule

Answer 29

That payment to the insurer must be done before they can get payed, they cannot get insurance just when disaster strikes