Insurance repetition Flashcards
Why is there insurance in commerce
because commerce is risk averse
Do you not have insurance if you dont buy it
No, then you are self insured, you are your own assurer because you cover your own risk
Insurances are based on public policy
No they are based on contract law
Anyone can be an insurance underwriter
No, it is regulated and you need to be a licensed professional
What is an ex gratia payment
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.
What are some other words for insurer and insured
underwriter and assured
Privity of contract is never a problem in insurance law especially in common law countries
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
What are the two types of insurance
indemnity and contingency insurance
what is the insurance that covers your losses although often includees a maximum cap called
indemnity insurance
What is the insurance where the underwriter pays you a specific sum called
contingency or non-indemnity insurance
Most insurance companies are for profit
True although historically they have often gone bust
Mutual insurance companies are for profit
False, they are a member support member scheme
PRI clubs for shipping insurance is an example of Mutual insurance
True
Consumer insurance has the same regulation as company insurance
False
Explain the tiers insurance scheme
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.
Explain retro insurance
When insurers lack the upfront ability to pay so they insure themselfves through reinsurers which are further insured and so on
What can you not insure
Illegal activities and something something you dont have an insurable interest in (that wont hurt you if you lose it) like your neighbors house
insurable interest defenition varries among nations but most agree that the contract has to be signed in utmost good faith
true for both civil and common law countries
What is the right that lets an indemnity insurer that has payed in full gain all the rights associated to the assuerd object called
The right of subrogation
If you sign an all risks included insurance contract you dont have to prove anything to get payed
Yes, that the damage was accidental or at least not your purposeful doing
Explain a nominated perill insurance contract
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
The size of an indemnity is often decided by the present market value
True
What is a value policy indemnity
When the value of an object is agreed beforehand in the contract which may consider the cost of replacement
Subrogation only applies to indemnity insurance
True
Is there a limit on value an insurance company can gain through the right of subrogation
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
What may cause insurance to be compulsory
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
Underwriters may be discriminated against if they are seen as a third parties source of compensation
Yes, at lesast they cannot use the assureds conduct as an excues not to pay
In the case of pollution insurance companies have no excuse to not pay except in the case of willful misconduct
True
What is the pay 2b payed rule
That payment to the insurer must be done before they can get payed, they cannot get insurance just when disaster strikes
