Chapter 4 IF1

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Provide a definition of insurable interest
"the legal right to insure arising out a financial relationship recognised at law between the insured and the subject matter of insurance."
1 of 12
What three elements are required for insurable interest to exist
Subject matter, Legal relationship, Financial value
2 of 12
What is the difference between the subject matter of insurance and the subject matter of the contract in household insurance?
The house is the subject matter of insurance, The house owner's financial interest in the house is the subject matter of the contract
3 of 12
When must insurable interest exist in marine insurance?
At time of loss only
4 of 12
When must insurable interest exist in life insurance
Only at inception not at time of loss
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When must insurable interest exist in property and other insurances
At inception and time of loss
6 of 12
Identify three ways insurable interest can be created
Common law e.g. ownership, Contract e.g. lease gives tenant responsibilities, Statute eg Repair of Benefices Building Measures Act (1972) requires upkeep of building
7 of 12
Who may have an insurable interest in property insurance?
Owners, Part or joint owners (for their share), Agents, Bailees (who look after others property), Tenants (who rent property)
8 of 12
In what does the insured have insurable interest in liability insurance?
Their potential liability to pay legal costs and damages
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What is the subject-matter of the contract
The name given to the financial interest a person has in the subject-matter of the insurance
10 of 12
What is the subject-matter of insurance
Can be any type of property or event which may result in a loss of legal right or the creation of a legal liability
11 of 12
What is a bailee
Where someone holds property on a temporary basis on behalf of the legal owner
12 of 12

Other cards in this set

Card 2

Front

What three elements are required for insurable interest to exist

Back

Subject matter, Legal relationship, Financial value

Card 3

Front

What is the difference between the subject matter of insurance and the subject matter of the contract in household insurance?

Back

Preview of the front of card 3

Card 4

Front

When must insurable interest exist in marine insurance?

Back

Preview of the front of card 4

Card 5

Front

When must insurable interest exist in life insurance

Back

Preview of the front of card 5
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