Insurance

• 1. Insurable interest

  • Before taking out insurance (and filling out the proposal form) you must have insurable interest in the item. You must gain by its existence and suffer financially by its loss.
  • Eg: You can insure your own car, but you cannot insure some one else’s car as you do not have an insurable interest in it. You will not suffer financially by its loss.
• 2. Utmost Good Faith

  When filling out the proposal form you must fill it out truthfully and give all correct and relevant details. You cannot lie accidentally or deliberately

  Eg: When taking out Life Assurance you must give details of any previous illnesses
• Indemnity

  • This applies when you are claiming compensation

  • You cannot make a profit from insurance
• Contribution

  • Applies when claiming compensation and you are insured with more than one insurance company

  • They will each “contribute” towards the compensation but not more than the value of the item (because you cannot make a profit)
• Subrogation - when an insurance company pays you compensation the item belongs to them.