Insurance Contracts

Visão Geral

Every policy you will ever study begins life as a contract, and a contract is nothing more than a promise the law is willing to enforce. Before an insurer pays a single naira, before indemnity or subrogation or any other principle can bite, there must first be a valid agreement between two parties. Get the foundation wrong and the whole policy can collapse as if it never existed.

In this lesson you will learn exactly what an insurance contract is and how it differs from buying bread or hiring a taxi, who the two parties are and what each must do, and the six essentials the law demands before it will call an agreement binding: offer, acceptance, consideration, capacity, legality and consent. You will then meet the one feature that sets insurance apart from almost every other contract in commerce, the duty of the utmost good faith, and learn to test any arrangement and say whether it truly holds.

Objetivos

Define an insurance contract and distinguish it from other commercial contracts
Identify the parties to an insurance contract and state the role of each
Explain the essential features of a valid contract: offer, acceptance, consideration, capacity, legality and consent
Apply the essential features to determine whether a given insurance arrangement is legally valid
Explain why an insurance contract is described as a contract of the utmost good faith

Nota de Aula

A young driver in Ibadan fills in a form, hands over ₦35,000 and drives away believing he is insured. Three weeks later he dents another car and makes a claim, only to be told there is no contract at all. How can that be, when he paid his money and holds a receipt? The answer lies in the rules that turn a loose arrangement into a binding contract. Money changing hands is not enough. A valid insurance contract has parts that must all be present, and if even one is missing the agreement is empty. Master these rules and you can look at any insurance arrangement and say, with confidence, whether the law will stand behind it.

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Avaliação da Lição

Parabéns por concluir a lição em Insurance Contracts. Agora que você explorou o conceitos e ideias-chave, é hora de colocar seu conhecimento à prova. Esta seção oferece uma variedade de práticas perguntas destinadas a reforçar sua compreensão e ajudá-lo a avaliar sua compreensão do material.

Irá encontrar uma mistura de tipos de perguntas, incluindo perguntas de escolha múltipla, perguntas de resposta curta e perguntas de redação. Cada pergunta é cuidadosamente elaborada para avaliar diferentes aspetos do seu conhecimento e competências de pensamento crítico.

Use esta secção de avaliação como uma oportunidade para reforçar a tua compreensão do tema e identificar quaisquer áreas onde possas precisar de estudo adicional. Não te deixes desencorajar pelos desafios que encontrares; em vez disso, vê-os como oportunidades de crescimento e melhoria.

The two parties to an insurance contract are the: A. Agent and the broker B. Insured and the insurer C. Proposer and the loss adjuster D. Underwriter and the reinsurer Answer: B
In insurance, a completed and submitted proposal form is best regarded as: A. An invitation to treat B. An acceptance C. An offer D. A counter offer Answer: C
Which of the following is NOT an essential feature of a valid insurance contract? A. Offer and acceptance B. Consideration C. Salvage D. Legality Answer: C
The consideration provided by the insurer in an insurance contract is the: A. Premium B. Promise to pay a valid claim C. Proposal form D. Sum insured Answer: B
An agreement to insure goods that are being smuggled into the country is: A. Valid and enforceable B. Voidable at the insurer's option C. Void for lack of legality D. Binding once the premium is paid Answer: C

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Livros Recomendados

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Descrição: 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

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Ano: 2008

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Descrição: 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

Legenda: Second edition

Editora: Himalaya Publishing House

Ano: 2017

ISBN: 978-93-5097-079-9

Descrição: An accessible treatment of insurance in four parts: the basics of risk, insurance management, life insurance and non-life insurance.

Perguntas Anteriores

Pergunta-se como são as perguntas anteriores sobre este tópico? Aqui estão várias perguntas sobre Insurance Contracts de anos passados.

WAEC SSCE - Insurance - 2017

Pergunta 1 Relatório

(a)(i) What is a proposal form?
(ii) List four general questions that are contained in a proposal form.

(b) List and explain three documents used in effecting insurance contracts.

Resposta

(a)(i) What a proposal form is

A proposal form is the printed document supplied by the insurer which the intending insured (the proposer) completes and signs to apply for insurance cover. It contains a set of questions through which the proposer supplies all the material facts about himself and the subject matter of the insurance. The information given forms the basis of the contract, enabling the insurer to assess the risk, decide whether to accept it and fix the appropriate premium.

(a)(ii) Four general questions contained in a proposal form

The full name and address of the proposer.
The age, sex and occupation of the proposer.
A description of the subject matter to be insured and the sum to be insured (its value).
Details of previous insurance and claims history, including whether any insurer has ever declined, cancelled or refused to renew a policy.

(Other acceptable general questions: the period of insurance required and a declaration that the answers are true.)

(b) Three documents used in effecting insurance contracts

Proposal form: As explained above, it is the document by which the proposer formally applies for cover and discloses the material facts on which the insurer bases its decision. It represents the offer stage of the contract.
Cover note: A temporary document issued by the insurer to confirm that cover is in force pending the preparation of the full policy. It gives the insured immediate protection and states the main terms, remaining valid for a short period (often 30 or 60 days) until the policy document is ready.
Insurance policy (policy document): The formal, legal contract between the insurer and the insured. It sets out in detail the names of the parties, the subject matter, the risks covered, the sum insured, the premium, the period of cover, the exclusions and the conditions. It is the conclusive evidence of the terms of the agreement.

(The certificate of insurance and the premium receipt are also acceptable documents.)

Detalhes da Resposta

(a)(i) What a proposal form is

(a)(ii) Four general questions contained in a proposal form

The full name and address of the proposer.
The age, sex and occupation of the proposer.
A description of the subject matter to be insured and the sum to be insured (its value).
Details of previous insurance and claims history, including whether any insurer has ever declined, cancelled or refused to renew a policy.

(Other acceptable general questions: the period of insurance required and a declaration that the answers are true.)

(b) Three documents used in effecting insurance contracts

Proposal form: As explained above, it is the document by which the proposer formally applies for cover and discloses the material facts on which the insurer bases its decision. It represents the offer stage of the contract.
Cover note: A temporary document issued by the insurer to confirm that cover is in force pending the preparation of the full policy. It gives the insured immediate protection and states the main terms, remaining valid for a short period (often 30 or 60 days) until the policy document is ready.
Insurance policy (policy document): The formal, legal contract between the insurer and the insured. It sets out in detail the names of the parties, the subject matter, the risks covered, the sum insured, the premium, the period of cover, the exclusions and the conditions. It is the conclusive evidence of the terms of the agreement.

(The certificate of insurance and the premium receipt are also acceptable documents.)

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