concealment
failure to disclose; hiding information
- if intentional and the information is material (important), coverage could be voided
- if not intentional, coverage can not be voided
warranty
- promise
- always made by the insurance company
- breach of warranty may void contract
- may be made by insured
- breach of warranty may void contract
- statement guaranteed to be true
- refer to material fact
unilateral
- only one legally enforceable promise made
- insurance company promises to pay for a covered loss
- insured may cancel at anytime
- insured doesn’t pay premium? insurance company will cancel
- insurer doesn’t pay claim? insured can sue, legally bound once policy is issued
utmost good faith
the insured and insurance company have a right to expect honesty from each other
misrepresentation
information given that is not true but would not affect the insurance company’s decision
aleatory
- unequal value
- small premium for a large amount of coverage
- pay premiums for many years without a claim
personal
contract between the insurance company and the insured; cannot be changed to someone else
fraud
intentional act to cheat another
representation
believed to be true
statements on application considered this
estoppel
once a waiver has been created, it cannot be reinstated
- continue to wave that right
- impression that a certain fact exists
conditional
insured must pay the premium for coverage and file a claim if a loss occurs
counteroffer
- agrees to issue policy but with higher premium or restrictions/ exclusions
- insured either accepts the conditions or withdraws their application
material misrepresentation
information given that is not true and does affect the insurer’s decision
waiver
voluntarily giving up a right
indemnity
- restore to whole, pre-loss state
- pays for the loss with no gain
- no more! no less!
imdemnification
adhesion
- policy written by the insurance company
- contract is like glue, cannot be changed
- insured has no input
- if ambiguous (not clear), court will take side of the insured
A cceptance
- offer must be unconditional and unqualified
- accepted by insurer
CLOAC
C ompetent parties
legal age
sane
sober
CLOAC
O ffer
proposal made by one of the potential parties to the contract
insured submits application and first month premium to insurer
insurer accepts or declines risk
CLOAC
L egal purpose
risk transfer does not violate the law
CLOAC
C onsideration
giving something of value exchange
premium ($) and statements made on application
CLOAC
