Term
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Definition
| Paying a premium to an insurer to cover against losses. It's a contract of risk covering adverse events; events you don't want to occur. |
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Term
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Definition
| Must be able to show that potential losses will affect you. Insurable interest forms the basis of insurance law and indemnity. |
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Term
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Definition
| Covers any liability you may incur, and covers you whether you're liable or not. |
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Term
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Definition
| You can only receive the amount of the item insured or the loss. There is no overcompensation. |
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Term
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Definition
| Covers losses related to the death. Differs in almost all aspects from other forms of insurance: there in no concept of indemnity as the loss of a life is impossible to monetize, and only people with a "defined insurable interest" can be covered under the Insurance Act. Individuals cannot hold more than one policy. |
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Term
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Definition
| You can ensure for a maximum amount, where you can receive more than indemnity if the maximum is higher than indemnity. If the maximum is less than indemnity you can only recover the policy maximum. |
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Term
| Multiple Policies and Contribution |
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Definition
| You can hold more than one insurance policy for coverage other than life insurance. You cannot recover more than the cost of damages. Each policy pays out in proportion to maximum face value of the amount of loss; contribution. |
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Term
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Definition
| If the contract has pre-agreed values laid out for certain losses, you are entitled to this amount in the case of a loss. No more, no less. |
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Term
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Definition
| In the case where full indemnity has been paid to the insured, the insurer retains the insureds rights to seek legal action against a third party. |
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Term
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Definition
| If there is a chance you may be liable, your insurer has the duty to defend you against any legal action. Insurer only has the duty to defend for liability within the scope of the insurance coverage. There is no duty to defend for intentional acts or things excluded in the contract. Duty to defend exists even if the insurer has no duty to indemnify the insured. |
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Term
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Definition
| Insured has a duty of utmost good faith, must not act fraudulently, and must act honestly in regards to claims. |
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Term
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Definition
| Insured person must disclose all information in their knowledge that is material to the contract. Information is material if it would have affected the insurers decision to form a contract, or would have affected the premiums charged. Misrepresentation causes a contract to be void; as if it was never created. Silence can be misrepresentation. |
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Term
| Fraudulent Misrepresentation |
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Definition
| When false statements are made with the intent to deceive the insurer in order to attain insurance coverage. Allows the insurer to terminate the contract. |
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Term
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Definition
| If a contract stands for 2-years or more then the contract cannot be deemed void due to misrepresentation, even if fraudulent misrepresentation is present. |
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Term
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Definition
| When the insurer agrees to pay coverage to settle an issue, but retains the right to sue if misrepresentation or a breach is discovered. |
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Term
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Definition
| Materiality is decided by the courts. To be material, information must have been a sufficient factor in the insurers decision of whether or not to enter a contract, or what premiums they would charged. |
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Term
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Definition
| Public policy, formed by the legislatures, requires auto insurance to cover Public Liability and Property Damage (PLPD). Third parties are not bound by the misrepresentation of the insured, and the insurer is still obliged to cover their loss/damages. It is a statutory condition that the insured does not race their vehicle, and that the insured be qualified to drive. *Could be argued that it is a warranty to be qualified to drive* |
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Term
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Definition
| Contract of insurance is formed when the insured makes and offer and the insurer accepts (or visa versa). At the formation of the contract certain terms are agreed upon that the parties must abide by. |
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Term
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Definition
| Contracts may be terminated after a set term (laid out in the contract) or through misrepresentation. Contracts may be terminated through the death of a party, but can sometimes be carried on through leniage. Life Insurance is terminated upon death of the insured, or at a set date in certain forms of life insurance (Term Life Insurance). |
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Term
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Definition
| Conditions are provisions, rules of conduct, duties and obligations required for coverage. Conditions must only substantially be obliged by, and will lead to damages if they are violated, and if the breach of condition is directly related to the loss that occured. |
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Term
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Definition
| A promise by the insured party that statements affecting the validity of the contract are true. If a warranty is breached the insurer is discharged from liability and the contract would be terminated, even if warranty is remote and not related to the matter at hand. Warranties are terms that absolutely must be followed and are strictly enforced. |
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Term
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Definition
| A portion of risk that was not agreed to be covered by the insurance contract. Exclusions always stand and are strictly enforced by the courts; the risk associated with the excluded act was never passed onto the insurer. |
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Term
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Definition
| A breach of contract is a violation of the contracts terms made after the formation of the contract. Breach cannot lead to the termination of the contract, but the insurer would not be obligated to cover the loss relating to the breach. The insured would still be covered by the contract after a breach and the contract would remain in existence. |
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Term
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Definition
| Bus drivers are accused of sexually assaulting a teen female. Insurer has no duty to defend as the act of sexual assault is an intentional act. Vicarious liability was not present as the employment was not sufficiently connected to the sexual assault. Plaintiff seeked damages from the insurer as they are a better source of compensation. |
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Term
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Definition
| Taku crashed a plane and seeked coverage for losses. Taku failed to disclose information about plane alteration, including the addition of an extra passenger seat. Amounts to misrepresentation as it would have affected premiums or the willingness of the insurer to form contract. |
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