Insurance contract law Flashcards
(28 cards)
General issues of insurance contract law
- Specific legal status and treatment by both private law and public law
- Traditional distrustful attitude of the law towards insurance
- Traditionally conceived as a law protective of the insurer
Key characteristics of insurance contract law
- Aleatory nature
- Indemnity rule
- Utmost good fait
- Adhesion (standard) contract
- The inversion of the production cycle
Insurable interest
The interest (either pecuniary or moral) of the insured in the non-occurrence of the insured event that must be pre-existing to the conclusion of the insurance contract.
Indemnity rule
The insured should never become better off because of the insurance contract. The insurance contract can cover the entire loss, but never more than the actual loss suffered by the insured. This rule does not apply to life insurance.
Over- and under-insurance
Over-insurance is when the insured amount is higher than the insured value.
Subrogation
The assumption by a third party (insurer) of another party’s legal right to collect a debt. An indemnity insurer may be entitled to be subrogated to the rights of insured as against a third party who is responsible for the damage to the insured.
Multiple insurance
For indemnity insurance, a time-wise or proportional reduction must take place in case of good faith, and a nullification of the contracts in case of bad faith. Multiple insurance does not affect non-indemnity insurance.
Obligation of good faith of both parties
For policyholder: to be open and correct, to take preventive measures, and to mitigate damage
For insurer: to inform , warn, and protect policyholders of possible misconduct
Contract of adhesion
The insured has no say in the writing of an insurance contract
Consequences of the inversion of the production cycle
- There is a need for statistics
- Insurers must behave like a trustee of the premiums => state supervision is needed
- Information asymmetry in favour of the insurer
Vertical and horizontal legislation
Vertical: legislation that imposes rights and duties upon contracting parties
Horizontal: legislation that only prohibits certain clauses. (more deregulatory approach)
Five degrees of mandatory force
- Contractual level: no legislation
- Suppletory level: the law is only applicable in the absence of derogating contractual agreement
- Mandatory level: no derogation from the law is allowed
- Social order: deals with more important matters
- International mandatory level: applies even if another national law is applicable
Ad validitatem
The written form is a requirement for the validity of the contract
Ad probationem
The written form is only required as a legally imposed form of evidence
Period of grace
The period during which the insurer is still bound to fulfil its obligations in case of non-payment of the premium
Non-insurable risk
The risk that if the insurer had known of, he would not have covered
Aggravation of risk
In case of non-life insurance, the insured must inform the insurer of an aggravation of risk and the insurer is allowed to react by either ending the contract or raising the premium.
Insurer’s claim to damages
The claim by the insurer against the policyholder for late declaration, if the insurer can prove he suffered a loss because of it
Claims of direct actions
A direct action is when the victim of an insured event can bring an action directly against the insurer and obtain compensation directly from the insurer.
Res inter alios acta, aliis nec nocet nec prodest
A law doctrine which holds that a contract cannot adversely affect the rights of one who is not a party to the contract.
Vnuk v. Zavarovalnica Triglav (2014) C-162/13
The concept of “use of vehicle” (as interpreted from Art 3(1) of the First Directive) covers any use of a vehicle that is consistent with the normal function of that vehicle, not restricted to road use
Isabel Rodrigues de Andrade v. Jose Manuel Proenca Slavador (2017) C-514/16
The concept of “use of vehicles” does not cover a situation in which an agricultural tractor has been involved in an accident when its principal function, at the time of the accident, was not to transport but to generate, as a machine for carrying out work.
Jose Torreiro v. AIG Europe Limited (2017) C-334/16
The first paragraph of Art 3 of Directive 2009/103/EC must be interpreted as precluding national legislation which makes it possible to exclude from compulsory insurance cover injuries and damage than result from the driving of motor vehicles on certain roads/terrain, irrespective of their characteristics.
BTA’ AS v. BNA’ AS (2018) C-648/17
The concept of “use of vehicles” covers a situation such as the opening of the doors of a stationary vehicle, and a situation in which damage to the property of a third party is caused by the use of the vehicle by a passenger.
