Unit 3 - The Contract of Insurance

Question 1

Explain the meaning of the Indemnify.

Answer 1

To protect someone against loss, damage or Liability.

Thus seen as the basis of the contract of Insurance.

Question 2

Name the 2 types of Insurance Contract.

Answer 2

1. Indemnity insurance
   ● it refers to Property- and Liability Insurance.
   ● Value of the claim is determined after the event and the loss of the object is determined by value at date and place of loss.
   ● Present value is considered up to a max. value…
2. Non- Indemnity insurance
   ● This refers to Life- and Accident Insurance.
   ● The Sum payable is a predetermined amount.

Question 3

What are the 4 ESSENTIALIA of an Insurance Contract?

Answer 3

1. Insured must PAY A PREMIUM.
   ● amount is not necessary at the conclusion of a contract. Undertaking to pay will suffice.
   ● A payment is usually a suspensive condition. This means that the once all requirements have been met the contract will be valid and payment can be made.
2. Insurer must undertake to COMPENSATE the insured.
3. It must stipulate the RISK the insured is covered for.
   ● The description of the risk must include:
   ♧ the object insured
   ♧ the hazard insured against
   ♧ the circumstances affecting the risk
4. An insurable interest.
   ● This exist when ever an event causes damage.
   ♧ Indemnity Insurance - insurable interest exist at the occurrence of the event.
   Non-indemnity Insurance - insurable interest exist at the conclusion of the contract.

Question 4

What is the meaning of the word SUBROGATION?

Answer 4

Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss.