Insurable Interest

Question 1

Insurable Interest

Answer 1

Must have it under contract of insurance if he wishes to make legally enforceable claim, without it depending on circumstances it may be void/illegal/unenforceable

Question 2

Indemnity and life insurance

Answer 2

There are different rules in insurable interest

Question 3

Problem?

Answer 3

If no rule about it, there it wouldn’t bar a certain mischief. Wager.

Question 4

Inception?

Answer 4

If don’t have it at time of inception, then the policy is illegal. Unjustified Enrichment may help to get premiums back if made an honest mistake.

Question 5

Policy on goods

Answer 5

Marine Insurance Act 1788 - Requires that names listed on policy, insurable interest must exist at time of loss.

Question 6

Policy on land

Answer 6

Scots law required insured has a property interest at time of loss
Arif v EIG - Fire insurance no insurance on third party
Cowan v Jeffrey Associations - Fir insurance company sole owner, they haven’t sold, claim rejected

Question 7

Relatives?

Answer 7

Don’t normally have insurable interest in relatives (child/parent) Worthington v Curtis

Only when pecuniary interest, legal right or an obligation confers insurable interest on you. Creditor may insure the life of a debtor for the amount he is owned. Godsall v Boldero

Child has an alimentary right in terms

Insurable interest in spouse or CP.

Question 8

Property without insurable interest

Answer 8

You need ownership interest.

A possessory interest in immoveable property can suffice if the possessor has rights of enjoyment in that property OR if he may be liable for losses/damages to it, but only to the value of possessory rights.

Question 9

If want to be insured against contractual liability

Answer 9

You can insure against it, don’t have ownership of goods, but want to have insurance

Question 10

No insurable interest

Answer 10

A parent’s child, mere cohabitees, mere BF/GF, mere possessors of property without rights or enjoyment, tenant of a property in respect of parts of the building nor occupied by him under the lease, an unsecured creditor does not have an II in the property of his debtor, shareholder does not have an II in the property of the company

Can insure spouse maybe a fiancee

Question 11

How is the issue raised?

Answer 11

Only raised if the insurer objects to payment under the policy on the basis. If they don’t object and pays there are no likely sanctions against the insured.

Question 12

Reform bill

Answer 12

May insure child, grandchild, or live with as spouse or CP

Question 13

Formation of Insurance Contract

Answer 13

It requires an offer and acceptance, and you will deal with there standard terms.

Canning v Farquhar - If risk changes then they can revoke the counter offer etc

Question 14

Disclosure Requirements

Answer 14

ICOBS 3 imposes general disclosure duties. Distance contracts made over internet phone or post must have relevant and clear info given to the customer in a durable form in good time before any contract is concluded

Need to disclose: Name, Payment requirements, total price, full details of cancellation

ICOBS 6.2.5 Firm must provide a consumer with information on the right to cancel a policy.

ICOBS 7 - General insurance customer who has been told of his right to cancel, 14 days to cancel

Question 15

Formalities

Answer 15

Marine needs to be writing, others don’t need to be but usually want all be temporary cover in writing.

Question 16

Life and Motor Insurance

Answer 16

Consquence of EU and UK Law

Question 17

Insurer bound

Answer 17

Sickness and Accident Assurance Association Ltd v General Accident Assurance Corpn Ltd - Insurer stated that cover does not commence until payment of first premium.

Question 18

Cover Notes

Answer 18

Insurance via agent and they might give you cover there and then, which is a contract even if limited duration. It can be oral.

Can end via:
Expiry,
Replacement with a new policy,
Operation of an express term allowing such cancellation by the insurer

If superseded then need to kill it via reference

Question 19

Temporary cover at end of policy

Answer 19

Taylor v Allan - Time of renewal, enter into new contract. Had a period of grace after policy expired, arrested for driving without insurance on 15th day. Grace period only existed in relation to continuing with company

Question 20

Insurer in relation to cover notes

Answer 20

If they want there standard terms in the cover not must incorporate them.

Re Colemans Depositories - Standard terms need to be clearly incorporated

Question 21

Duration

Answer 21

Insurance policy is determined by its contract terms, including the right of the insurer to cancel the policy. There doesnt need to be any right for the insured to renew policy.

Cancellation by insurer - policy may require notice or immediate cancellation.

Sun Fire Office v Hart - Fire caused, a couple of fires and civil unrest, cancelled policy and it was okay

General Accident Assurance v Chandermull Jain - Flood might be coming and cancelled policy it was okay

Risk must not yet have occurred and insurer must return premiums pro rata

Life Insurance - Based on age and stage life, if keep paying preminmums then thought to be paid as the policy is assumed to be continued not replaced.

ICOBS 5 - Most allow days of grace

Question 22

When the insurer won’t pay

Answer 22

If risk is not covered 
No insurable interest 
Payment contrary to public policy 
Policy is void/voidable/discharge 
Claim is repudiated

Question 23

Contract might be void

Answer 23

Illegality
Error
Unlawful use of property

Question 24

Contract may be voidable

Answer 24

By insurer if the insured party may fail to live up to disclosure under contract. Fails to comply with duty of fair presentation.

Question 25

Insurance Policy

Answer 25

Discharged when they breach warranty
Breach of fundamental term discharges the contractual obligation. This is traditional

2015 Act

Question 26

Denying a Contract/Claim

Answer 26

Insurance terms called conditions will offer a potential to the insurer to repudiate the contract if they are so drafted as to be suspensive conditions to the insurer’s liability to any claim, and are then breached by the insured, but if there is a causal connection between the breach of condition and the loss

A condition might also delimit what the risk is, which would subject insurer to liability if it continues to be complied with by the insured.

Question 27

Loss of Insurer’s Right to Repudiate

Answer 27

There is a possible breach when the insurer will loss its right to repudiate if: waive breach, affirm a breach, become personally barred fro asserting a breach

Sometimes an indisputably clause may be put in a life policy so after a certain point so that the insurer can’t make defences to it.