Legal Concepts Flashcards
This Occurs when a company gives up a legal right.
Waiver
This Occurs when a company is not allowed to exercise a right. If you waive a right, you are “estopped” from exercising that right. Example: Some insurance contracts have a policyholder waive their right of recovery against someone who injures the insured. That allows the insurer to recover money from the other party that the insurer paid to the insured.
Estoppel
A contract cannot be modified by parol (oral) evidence.
Parol Evidence Rule
This means an insurer cancels a contract from the inception and no coverage is ever in force.
Void
is a valid contract that may be voidable if fraud, concealment or misrepresentation is found.
Voidable
Intentionally falsifying documents on an application in order to deceive an agent or insurer. For an example, an applicant may purposely state on a health insurance application that he has never had any health issues when he actually had two major heart surgeries in the last two years.
Fraud
Occurs when an agent gives back a portion of the premium to the client.
Rebating
Persuading the client to drop an existing policy in order to buy yours.
Twisting
Persuading a client to cancel an existing policy and rewriting it with the same insurer in order to receive a higher commission.
Churning
Making a false statement, written or verbal, about another agent or insurance company that injures their reputation.
Defamation
An insurance company that does not have a “certificate authority.”
Unauthorized insurer
Written or oral statement that does not accurately describe a policy’s features, bene- fits or coverages.
Misrepresentation
