Chapter 3: Insurance Policies Flashcards
(30 cards)
What is the parol evidence rule?
Neither party can rely on negotiations leading up to the contract, only the contract itself.
Define ‘scheduled form’
The policy wording is pre printed and the schedule is incorporated into the policy
Define ‘policy schedule’
The document containing all the variable info concerning the insured and the risk
What impact does the Consumer Insurance (Disclosure and Representations) Act have on policy wordings?
Insurers need to consider the clarity and accessibility of any policy wordings, and any explanatory materials for consumers.
What impact does the insurance act 2015 have on policy wordings?
Everyone needs to be clear on policy terms and remedies before entering the contract. Same as Consumer Rights Act 2015.
What is contra proferentem?
The contract will be read on the favour of the party who didn’t draw it up.
What is the basic structure of an insurance policy?
Heading, preamble, signature clause, operative clause, exclusions/exceptions, conditions, policy schedule, and information and facility.
What is another name for the preamble?
The recital clause. It refers to the two parties, and lays out they will enter a contract. It also says the proposal form is part of the contract.
Define ‘operative clause’
Also known as the insuring clause, this outlines the cover provided
Define ‘exceptions’
Same as exclusions- either general or specific
What are examples of standard exclusions?
War, radioactive contamination, terrorism, environmental, cyber
What are the two main types of condition?
Implied or express
What are examples of implied conditions?
The insured must not use insurance as an alternative to acting carefully, must not hinder the insurers investigating a claim
What are examples of common express conditions?
Duties of the insured, alteration to duty of disclosure as a continuing duty, fraud, reasonable precautions
What are the three categories of condition?
Condition precedent to the contract, conditions subsequent to the contract, and conditions precedent to the liability
Define ‘contribution’
The right of an insurer to call upon other insurers similarly liable to the same insured, to cover the claims cost.
Define ‘subrogation’
The right of the insurer to take over the insured’s rights and recover payment from a third party responsible for a loss.
Define ‘arbitration’
A clause to deal with quantum disputes
Define ‘warranties’
Promises made by the insured saying something will be done or does exist. Breaches of warranty are now suspensive.
Define ‘representations’
Written or oral statements made during the negotiations for a contract, not normally put in the contract
Define ‘excesses’
The first amount of each and every claim for which the insured is responsible
Define ‘deductible’
A very large excess
Define ‘franchises’
A fixed amount. Once this is exceeded, the claim is paid in full.
With a general insurance policy, why is radioactive contamination and its consequences excluded?
The potential losses are seen as being beyond the capacity of individual insurers.
