Insurance WAEC

Utmost Good Faith

Übersicht

When you buy a shirt, the seller need not warn you that it shrinks; you can inspect it and decide for yourself. Insurance is different. The insurer cannot see inside your warehouse, read your medical history or watch how you drive, so it must trust what you tell it. That trust is not left to chance. The law raises every insurance contract to a higher standard of honesty called utmost good faith, and it places a positive duty on you to volunteer every fact that matters.

In this lesson you will learn what utmost good faith means and why insurance, above almost every other contract, demands it. You will learn how to tell a material fact from an unimportant one, which facts you must disclose and which you may keep to yourself, and exactly how a policy can collapse through non-disclosure, concealment or misrepresentation. Above all you will learn the distinction examiners test every year: innocent breach against fraudulent breach, and the very different remedy each one hands the insurer.

Ziele

  1. Define utmost good faith and explain why insurance contracts demand it
  2. Explain the duty of disclosure and identify what counts as a material fact
  3. Distinguish facts that must be disclosed from those that need not be
  4. Describe the breaches of utmost good faith: non-disclosure, concealment, innocent and fraudulent misrepresentation
  5. State the effect of each breach on the validity of the policy

Mindmap

Dieses Thema ist als Karte dargestellt, damit die Zusammenhange sichtbar werden.

Lernkarten

Schnelles Abfragen der Fakten, die zu diesem Thema gepruft werden.

Lektionshinweis

Emeka applies for a health policy and, embarrassed about it, says nothing of the heart condition he was treated for last year. The insurer, knowing none of this, happily issues the cover. Eight months later Emeka is hospitalised and submits a large claim. The insurer investigates, discovers the earlier illness, and refuses to pay a single naira. Emeka is furious: he never lied, he says, he was simply never asked. Whether the insurer is right turns entirely on one principle, the one that sits underneath every proposal form you will ever sign: the duty of utmost good faith. Master it and you can predict how a dispute like Emeka's will end before a court ever does.

Unterrichtsbewertung

Herzlichen Glückwunsch zum Abschluss der Lektion über Utmost Good Faith. Jetzt, da Sie die wichtigsten Konzepte und Ideen erkundet haben,

Sie werden auf eine Mischung verschiedener Fragetypen stoßen, darunter Multiple-Choice-Fragen, Kurzantwortfragen und Aufsatzfragen. Jede Frage ist sorgfältig ausgearbeitet, um verschiedene Aspekte Ihres Wissens und Ihrer kritischen Denkfähigkeiten zu bewerten.

Nutzen Sie diesen Bewertungsteil als Gelegenheit, Ihr Verständnis des Themas zu festigen und Bereiche zu identifizieren, in denen Sie möglicherweise zusätzlichen Lernbedarf haben.

  1. The principle of utmost good faith requires a proposer to: A. Disclose only the facts the insurer asks about B. Disclose voluntarily every material fact known to the proposer C. Disclose facts only after a claim is made D. Rely on the insurer to inspect the risk Answer: B
  2. A material fact is one which: A. The proposer personally considers interesting B. Would influence a prudent insurer in accepting or rating the risk C. Is written in every proposal form D. Only becomes relevant after a loss Answer: B
  3. Which of the following need NOT be disclosed to the insurer? A. A previous fire at the premises to be insured B. A previous policy cancelled by another insurer C. A newly fitted burglar alarm that reduces the risk D. A serious illness on a life proposal Answer: C
  4. A false statement of fact made honestly in the belief that it is true is: A. A fraudulent misrepresentation B. An innocent misrepresentation C. Concealment D. A warranty Answer: B
  5. Where a proposer is guilty of fraudulent misrepresentation, the insurer may: A. Avoid the policy but must return the premium B. Only reduce the claim proportionately C. Avoid the policy, refuse the claim and retain the premium D. Do nothing, as the policy is fully valid Answer: C

Empfohlene Bücher

Principles of Risk Management and Insurance
Principles of Risk Management and Insurance
Untertitel: Thirteenth edition
Verleger: Pearson
Jahr: 2016
ISBN: 978-0-13-408257-8
Beschreibung: The standard introduction to risk and insurance, covering risk management, insurer operations and the main lines of life, health, property and liability cover.
Fundamentals of Risk and Insurance
Fundamentals of Risk and Insurance
Untertitel: Tenth edition
Verleger: Wiley
Jahr: 2008
ISBN: 978-0-470-08753-4
Beschreibung: A clear account of the nature of risk and the economics of insurance, written for beginning students across life, health, property and liability insurance.
Fundamentals of Insurance
Fundamentals of Insurance
Untertitel: Second edition
Verleger: Himalaya Publishing House
Jahr: 2017
ISBN: 978-93-5097-079-9
Beschreibung: An accessible treatment of insurance in four parts: the basics of risk, insurance management, life insurance and non-life insurance.

Wiederholungsfragen

Fragen Sie sich, wie frühere Prüfungsfragen zu diesem Thema aussehen? Hier sind n Fragen zu Utmost Good Faith aus den vergangenen Jahren.

WAEC SSCE - Insurance - 2015

Frage 1 Bericht

List and explain five principles of insurance.

Antwortdetails

Five principles of insurance

  1. Utmost good faith (uberrimae fidei): Both parties to the contract, and especially the proposer, must disclose all material facts truthfully and completely. Concealment or misrepresentation of a material fact makes the contract voidable at the option of the insurer.
  2. Insurable interest: The insured must have a legal or financial relationship with the subject matter such that he benefits from its safety and suffers loss from its damage or destruction. Without insurable interest the contract is void because it would amount to gambling.
  3. Indemnity: The insurer undertakes to restore the insured, so far as money can, to the exact financial position he occupied immediately before the loss, no better and no worse. This prevents the insured from making a profit out of a loss. (It does not apply to life and personal accident.)
  4. Subrogation: After indemnifying the insured, the insurer takes over the insured's legal rights and remedies against any third party responsible for the loss, so that the insurer can recover its outlay. This supports the principle of indemnity.
  5. Contribution: Where the same risk is insured with more than one insurer, each insurer shares the loss rateably in proportion to the sum it insured, so that the insured recovers only the actual loss once and not more.

A further principle is proximate cause, under which the insurer is liable only where the nearest, most effective cause of the loss is a peril insured against.

Antwort anzeigen