Study NOtes • Exam and Assignment Memo • Summary notes of the course material • lecturer's exam tips • Helps you understand exam structure and how to answer questions.
Indemnity insurance: the contract between the parties –
insurer will indemnify the insured for patrimonial loss/
damages as a result of the happening of the event insured
against. Purpose of the contract: restore the insured to the
position he occupied before. The insured isn’t allowed to make a
profit out of his loss. Interests insured against are patrimonial.
Capital insurance: insurer undertakes to pay a specified
amount to the insured on the happening of the event insured
against. The interest is non-patrimonial.
Property insurance: positive elements of the insured’s estate =
OBJECT
Liability insurance: negative elements, which come into being
as part of the insured’s patrimony (medical expenses)
Short term insurance: business of providing policy benefits
under short term policies = health policy
Long term insurance policy: business of providing policy
benefits under the definition of long term insurance policies =
life policy.
Value policy: specify a value for the object of insurance – this is
done to avoid the difficulty of proving the exact value of the
object of insurance.
Unvalued policies: no valuation and the insured has to prove
his loss and its extent in the usual way.
An insurance contract: An insurance contract is a tangible
agreement
An insurance policy: The policy is the reduction of that
agreement into a tangible form.
A cover note: document issued by the insurance company
giving temporary insurance until a formal policy is issued
An insurance policy: contract between the insurer and the
insured, the policy defines what the company agrees to cover for
what period of time and it describes the obligations and
responsibilities of the insured
The insured: the insured is the person who enjoys protection in
terms of the policy and he is the 1st holder of the policy.
, The life insured: In the case of life insurance, the person whose
life the contract operates is the insured/ life insured
The beneficiary in terms of an insurance contract; A
contract of insurance may offer protection to a 3rd party by
virtue of a provision in favor of that party = the 3rd party is also
an insured, provided he accepts the benefit.
Affirmative warranty; Is a warranty that particular facts are
true at the date when the warranty is given
Promissory warranty; Warranty with regard to the future: that
a particular fact or state of affairs will be true/ continue to be
true
An insurance agent: insurers aren’t natural people and are
legal entities who can only act through people representing
them: prospective insured gets a broker to negotiate the most
favorable terms
An insurance broker; the insured may employ a representative
to act on his behalf in obtaining, negotiating and maintaining
insurance cover.
Misrepresentation (Positive misrepresentation): This is a
positive act consisting in a pre-contractual statement of fact
made by one party to a contract of insurance.
Non-disclosure (Negative Misrepresentation): This is the
wrongful failure by one of the parties to an insurance contract,
during the course of negotiations preceding the contract, to
disclose certain facts within his knowledge, as a result of which
the other party is induced to enter into the contract/ to agree to
specific terms in the contract, whereas he wouldn’t have done,
had those facts been disclosed.
Insurance against all risks; All cover risk: loss or damage from
whatever cause. The insured doesn’t need to prove a causal link
between the peril and the loss This doesn’t cover: wear and
tear/ loss caused by the insured’s intentional conduct
Insurance against all losses: Contracts covering all loss
resulting from the insured peril isn’t unknown, but insurance
usually covers only specific loss. IC usually covers any loss
suffered as a result of damage/ destruction of an object of risk
to the extent of the insured interest in the object.
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