Insurance law
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INSURANCE LAW. Definition.

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INSURANCE LAW

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Insurance law

INSURANCE LAW


Definition

Definition

  • A contract between an insurer and the insured in terms of which the insurer undertakes, in exchange for the payment of a sum of money (the premium), to give to the insured a sum of money (or its equivalent) on the occurrence of a specified but uncertain future event in which the insured has some interest


Insurance legislation

Insurance legislation

  • Long Term Insurance Act

  • Short Term Insurance Act


The 4 essential elements

The 4 essential elements

  • The insurers obligation to pay a sum of money or its equivalent

  • The insured's obligation to pay the premium

  • The occurrence of an uncertain future event

  • An insurable interest


Types of insurance

Types of insurance

  • Indemnity insurance

  • Non-indemnity insurance


Indemnity insurance

Indemnity insurance

  • There is uncertainty as to whether the insured event will ever occur

    • Eg: a hijacking, a car accident, a fire

  • The amount of the loss (if any) is unknown at the time of taking out the policy

  • The insured must have an insurable interest in what is being insured


Non indemnity insurance

Non-indemnity insurance

  • It is certain that the event will occur – the only uncertainty is when

    • Eg: a persons death

  • The amount the insurer must pay is decided at the time the insurance is taken out & is not related to the loss

  • The insured must have an insurable interest in the life of the person being insured


Good faith

Good faith

  • The concept of ubermae fides


Warranties

Warranties

  • Affirmative warranties

  • Promissory warranties


Affirmative warranties

Affirmative warranties

  • A declaration

    • Eg:Age last birthday

  • Materiality


Promissory warranties

Promissory warranties

  • A promise or undertaking

    • Eg: The insured must arm the alarm system whenever leaving the property unattended

  • Does not have to be material


Under over insurance

Under & over insurance

  • Over insured – no benefit to insured

  • Under insured – insurer will apply average


Subrogation

Subrogation

  • Places insurer in shoes of insured

  • Allows insurer to sue in insured’s name

  • Cannot benefit twice from your mishap


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