Reinstatement Flashcards
What is reinstatement generally?
The process by which an insurance policy that has lapsed or been terminated due to non-payment of premiums is restored to its original state, as if it had never lapsed.
What is reinstatement in the context of the subrogation principle?
Sometimes, instead of a cash payout, the insurer reinstates the insured by repairing or replacing the damaged property.
Can the insured demand reinstatement instead of payment or vice versa?
No because the right of election lies with the insurer.
When must the right of election be exercised?
Within a reasonable time or within the time specified in the policy.
What is the effect of exercising the right of election on the insurer?
It is binding and the company cannot later change its mind.
