Unit 2 Flashcards
CLOAC
- Consideration- giving something of value
Insured - statements made on app +premium
Insurer - promises to pay claim - Legal purpose
- Offer
- Acceptance
- Competent parties
Consideration
Premium and statements made on app
Legal Purpose
Risk Transfer doesn’t violate the law
Offer and Acceptance
Offer - made by insured
Insured submits app. And first premium
Insurer accepts or declines risk
Counteroffer - made by insurer
Agrees to issue policy but with higher premium or restrictions
Insured either accepts the conditions or withdrawals their app.
Competent parties
Legal age (18)
Mentally sane
Sober
Adhesion
Policy written by insurer
Contract like glue- cannot be changed
Insured has not input
If not clear, court will take the side of insured
Aleatory
Not equal value
Small premium for a large amt. of coverage
Utmost good faith
The insured and insurer have a right to expect honesty from each other
Unilateral
Only one legally enforceable promise made
Conditional
Insured must pay premium for coverage and file claim if loss occurs
Indemnity
Makes whole
Restores the insured to a pre-loss state
Pays for the loss with no gain
Representation
Believed to be true
Misrepresentation
Representation that is false but does not affect insurer decision
Material Misrepresentation
False Information given that does affect insurers decision
Warranty
Promise
Breach of warranty may void the contract
Concealment
Failure to disclose info
If intentional and info is important coverage can be voided
If not intention coverage CANNOT be voided
Fraud
Intentional act to deceive or cheat
Waiver
Voluntarily giving up right
Estoppel
Once right is waived. It cannot be reinstated and used against insured
