RIBO Chapter 2 C82 (Insurance contracts) Already Graded A

RIBO Chapter 2 C82 (Insurance contracts) Already Graded A An element distinctive to insurance contracts. To people have _______ ________ in something when they stand in such a legal relationship to it that they may be financially prejudiced by its loss of damage and may financially benefit by its continued existence Insurable interest An element distinctive to insurance contracts. This means to place someone back in the same financial position that they were in prior to the loss. This means that the insureds are to collect the amount of their financial loss - no more and no less Indemnify Another element that is distinctive to insurance contracts. This is the absolute and perfect candor or openness and honesty - concealing nothing. It implies a standard of honesty that is greater than that usually required in most ordinary contracts. It is required of both the insurer and the insured Utmost good faith The replacement value of the property less any accumulated depreciation (or with added appreciation) Actual cash value Also used as a verb indicating the process of taking steps to reduce the amount of loss - if insured is reimbursed for the loss as if it were a total loss, the insurer is entitled to possession to retain proceeds and reduce its loss Salvage Property saved from loss Salvage The legal process by which an insurer who has paid a loss pursues any rights of recovery against a responsible third party Subrogation The sharing of loss or liability between two or more insurance companies covering the same risk. Contribution Some contracts have a provision to the effect that coverage under this contract is excess Excess insurance One that insures property for an amount which is agreed upon by the insurer and the insured at the time the contract is made. It states that in the event of a total loss, a specified amount will be paid to the insured. Generally used when insuring items on which it would be difficult to determine a true value after a loss occurred. Jewellery, paintings, antiques etc., Valued contracts A fact that would, if known affect the minds of reasonable, prudent and experienced insurers in deciding: - acceptability of the risk - amount of premium to be charged - conditions applicable go accepting the risk Material fact Is an incorrect statement made about a material fact. It can include an omission of certain facts. It can be innocent, careless, or fraudulent Misrepresentation Forms of misrepresentation. Withholding of information pertinent to a risk. It is silence when there exists an obligation to speak Non-disclosure and concealment The immediate and effective cause of the loss - not necessarily the last event before the occurrence, which in a chain of circumstances leads naturally and directly in the ordinary course of events to the loss. Proximate cause A cause which is not the proximate cause. Remote cause Last link in the chain Immediate cause