The Insurance Contract

Question 1

The agent

Answer 1

• Whose agent?
• Authority of the agent

Question 2

Insurance Contract

Formation of the Contract

Answer 2

1. Proposal = INVITATION
2. Application = OFFER
3. Issues Policy = ACCEPTANCE

Question 3

Insurable Interest

Answer 3

1) a direct financial interest in the life or proerty insured
2) When you will suffer a loss from damage or destruction of the person or property

*when you have a car you have the financial interest in keeping it safe – if something were to happen to the car, you would suffer financial loss

Question 4

Disclosure Requirements

Answer 4

1. Uberrimae Fidei
2. There is a legal duty to disclose all MATERIAL information
3. You do not need to disclose speculation
4. You do not need to disclose what the insurance company already knows or ought to know
5. Reasonable insurer test

Question 5

Uberrimae fidei

Answer 5

the contract of utmost faith

*both the insurer and the insured party have to the best interest of one another and provide accurate information

Question 6

Reasonable insurer test

Answer 6

would the non-disclosed information have influenced a reasonable insurer to refuse the risk or alter the premium

Question 7

The insurance claim

Subrogation

Answer 7

when an insurance company pays a claim, the insurance company steps into the shoes of the insured and can use the wrongdoer

*when an insurance company steps in to take over the rights and claims of someone they’ve compensated for a loss

*example: when your insurance pays for damages in a car accident

Question 8

Co-Insurance

Answer 8

an insured individual’s share of the costs of a covered expense

Question 9

The Guarantee Contract

Guarantees

Answer 9

the guarantor promises to pay for the debt of another if the other person defaults

Question 10

The Guarantee Contract

Idemnity

Answer 10

when you agree to accept primary responsibility for the debt of another

*the compensations or reimbursement for a loss or damage

Question 11

The Guarantee Contract

Answer 11

1. Guarantees Reviewed
2. Consideration Requirements
3. Guarantor’s rights

Question 12

Discharge

Answer 12

if there is a change in one contract, it will change the other contract, or kill it completely

Question 13

Defenses (Guarantor’s rights)

Answer 13

can use any legal reason that the debtor might have

*if there is any legal reason that the debtor can’t pay back the $100,000

Question 14

Subrogration

Answer 14

a. a right held by most insurancfe carriers to legally pursue a third party that caused an insurance loss to the insured

*STEPPING INTO SOMEONE ELSE’S SHOES TO TAKE ON THEIR RIGHTS AND CLAIMS