Principles of insurance law Flashcards
What is a contract of ensurance
The agreement of one party to pay the other when an event happens, provide an equivalent benefit or make payments to the other untill such an event happens in exchange for a consideration payed.
What are the two types of insurance contracts
Indemnity insurace or contingency insurance
What is indemnity insurance
When the undertaking is to pay an indemnity against a potential loss or liability of the insured, f.ex fire and car ensurance
What is contingency insurance
When a specific sum is to be payed regardless of the cost of the event, The sum may also be payed imediately in exchange for periodic payments in the future
It is of an insurance contracts essance that the event insured is uncertain
Yes, so perishable goods or self inflicted damages
Public policy may pervent a person from receiving insurance payments
True
A person can take out a life insurance for a strangers life
False, an insurance contract must be taken out for the persons own interest (insurable interest)
Anyone can conduct business as an insurer
False, they must be aproved by the financial conduct authority FCA, they among other things regulate that the contract is user firendly and not full of legal technocalites
What does it mean that an insurance contract is uberrimae fidei
That it is a contract of utmost fidelity and that the insured must disclose all the rellevent information that they are aware of before the contract is signed (a fair presentation of risk)
When may an insured not provide relevant information
If the secret deminishes the risk, if the insurer knows ought to know or is persumed to know or if the insurer waives the information
An insurer can decline to provide insurance if utmost good faith was not observed
Not always, if the failure to inform was not deliberate nor reckless there are other remedies by the 2015 act
All that can effect the judgement of a prudent insurer must be disclosed before an insurance contract
True, this includes unfounded rumors
What is the contra conferentum rule
That each term of the contract should be interpreted in a manner least favorable to the one who has written it (usually the insurer)
A condition in an insurance contract may refer to something to be done after the contract is signed
True
What is a warrenty in an insurance contract
An undertaking given by the insured which formed the basis of the contract and releases the insurer of any obligation automatically (at least durring the breach or consequences of the breach period) if not fufilled f.ex the truthful answer of a question
If the insured can prove that compliance with the warrenty did not decrease the risk of gaining the claim they sought they may still be compensated
True, so a lack of a burglury alarm may not be the cause of withholding storm insurance even if such was a required warrenty. Although this clause can be contracted out of as long as the term is clear and unambigous.
The insured has often not a duty to inform the insurer in short notice of a loss
False
the burden of onus is on the insured
True, they must prove that they have lost
The burden of onus regarding noncompliance with the contract lies with the insurer
True
Can a person or company make an insurance contract for employees or relatives
Yes and these will be able to claim insurance in their own name
What rights does an insurer against and indemnity have
Salvage, subrogation and contribution
What is the right of salvage under indemnity insurance
That if the ensurer compensates the full value of property before an event they gain ownership of what remains after the compensation
What is the rights of subrogation under an indemnity insurance
That the insured has no right to more than the full indemnity of their loss and that the insurer gains all rights related to the lost property and to stand in the insureds shoes and can f.ex sue a third party who is liable for the destruction in tort
What is the rights of contribution under an indemnity insurance
If an insured has taken out more then their indemnity but has mutliple insurers the one that has lost more then they shall may take a contrinution from other insurers
Marine insurance has no differences from other types of insurance
False, one difference is that it must be recoreded in a written policy
An insurance claim must be made by the insured
True
An insurance claim must be made in reasonable time so that the evidence of the loss is not obscured
True
What may happen if an insured reports a fradulent claim
the insurer may decline to pay, retake their payment, disband the contract while keeping all past premiums depending on the contract
