Chapter 8 IF1

?
What is the definition of the principle of contribution?
“ The right of an insurer who has paid under a policy to call upon others similarly but not necessarily equally liable to the same insured to contribute to the payment”
1 of 18
If a policyholder had two life policies would contribution apply?
No, as life policies are benefit policies
2 of 18
Identify two ways the principle of contribution is modified.
1. Policies contain non-contribution conditions, 2. There are market agreements between insurers where they agree not to seek contribution in certain instances
3 of 18
Identify five aspects that must be common to both policies for contribution to apply.
P eril (cover same peril), I ndemnity (both policies of indemnity), I nsurable Interest (cover same insurable interest), L iable (both policies liable for loss), S ubject matter (both policies cover same subject matter of insurance
4 of 18
What does a rateable proportion contribution condition state
That the policy will only pay their proportion of the loss
5 of 18
What does a non-contribution clause state?
That the policy will not contribute to a loss if it is covered under another policy
6 of 18
If both policies contain a non contribution clause what happens?
The loss is shared proportionately.
7 of 18
If one policy has a non-contribution condition and one a rateable proportion condition what happens?
The insurer with the rateable proportion condition will pay the whole of the claim as they have the weaker clause
8 of 18
What does the specific insurance condition state?
That insurers will not contribute to a loss if the loss is more specifically insured?
9 of 18
Identify two market agreements on contribution
Claims under driving other cars extension - vehicle insurers do not seek contribution from driver's insurers, Travel and household
10 of 18
Identify two reasons insurers have market agreements on contribution
Save cost, Reduce disputes
11 of 18
Define "subrogation"
“the right of one person, having indemnified another under a legal obligation to do so, to stand in the place of that other and avail himself of all the rights and remedies of that other, whether already enforced or not”
12 of 18
What are the two method for sharing losses between policies under the principle of contribution
Sum insured method, Independent liability method
13 of 18
How does the sum insured method operate?
Insurer A pays Loss multipled by Sum Insured of Insurer A divided by total sum insured of Insurer A and B
14 of 18
When is the sum insured method used?
On property claims where the policies are not subject to average.
15 of 18
How does the independent liability method work
Loss shared in proportion to liabilities of each insurer if the other had not been paying the loss
16 of 18
What is the term for any residual value left in the thing insured after it has been considered beyond economic repair
salvage
17 of 18
What are the precluded subrogation rights
If the insured has no rights, in a benefit policy, if there is a subrogation waiver, for negligent fellow employees
18 of 18

Other cards in this set

Card 2

Front

If a policyholder had two life policies would contribution apply?

Back

No, as life policies are benefit policies

Card 3

Front

Identify two ways the principle of contribution is modified.

Back

Preview of the front of card 3

Card 4

Front

Identify five aspects that must be common to both policies for contribution to apply.

Back

Preview of the front of card 4

Card 5

Front

What does a rateable proportion contribution condition state

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Other resources:

Stock
See all Other resources »See all IF1 Book resources »