Elements of insurance Flashcards Preview

Insurance, Risk Management, and EE Benefits > Elements of insurance > Flashcards

Flashcards in Elements of insurance Deck (8)
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1
Q

Indemnity

A
  • Only indemnified for up to the actual loss amount
  • an exception is life insurance, which pays the stated face value
2
Q

Personal contract

A

Nontransferable

3
Q

Contract of adhesion

A

Take it or leave it

4
Q

Contract of utmost good faith

A

May be adjusted by

  • Misrepresentation of fact
  • Misrepresentation of opinion
  • Concealment
  • Waiver
  • Estoppel
5
Q

Unilateral contract

A

Only the insurer makes legally enforceable promises

6
Q

Conditional contract

A

Premium must be paid, and a covered loss must occur

7
Q

Aleatory contract

A

Outcome affected by chance; dollars collected by the parties may not be equal

8
Q

Subrogation

A

If the insurer pays the insured for a loss caused by a third party, the insured is required to assign his right to recover from the third party to the insurer