INS200 C4

What is the principle of insurable interest?

• The insured must have a financial stake in the subject matter of the insurance

• The insured must disclose all material facts to the insurer

• The insured must contribute to the insurance premium

• The insured must transfer the insurance policy to another party

What is the duty of utmost good faith?

• The insurer must deny all claims

• The insured must keep the insurance policy a secret

• The insurer must pay the claim immediately

• The insured must disclose all material facts to the insurer

What is a material fact in the context of insurance?

• Any fact that is irrelevant to the insurance contract

• Any fact that is known only to the insurer

• Any fact that is known or ought to be known by the insured and is relevant to the insurance contract

• Any fact that is disclosed after the claim is made

What is the principle of proximate cause?

• The cause of the loss must be intentional

• The cause of the loss must be disclosed to the insurer

• The cause of the loss must be unrelated to the insured event

• The cause of the loss must be directly related to the insured event

How do insurance companies uphold the principle of indemnity?

• By compensating the insured for the actual loss suffered

• By paying the insured an amount greater than the actual loss

• By transferring the insurance policy to another party

• By denying all claims made by the insured

Why is subrogation necessary in insurance?

• To transfer the insurance policy to another party

• To enable the insurer to recover the amount it has paid to the insured from a third party

• To prevent the insured from making a claim

• To allow the insured to make multiple claims for the same loss

In the principle of contribution, how is the amount of contribution derived?

• Based on the age of the insured

• Based on the gender of the insured

• Based on the percentage of cover provided by each insurer

• Based on the number of claims made by the insured

What are the conditions for the application of contribution?

• The insured must disclose all material facts to the insurer

• The insured must have a financial stake in the subject matter of the insurance

• The insured must make multiple claims for the same loss

• The insured must transfer the insurance policy to another party

In the event of a claim, how does each insurer contribute in the principle of contribution?

• Each insurer will contribute based on the number of claims made by the insured

• Each insurer will contribute based on the percentage of cover provided by each insurer

• Each insurer will contribute based on the gender of the insured

• Each insurer will contribute based on the age of the insured

What is the duration of the duty of utmost good faith?

• It lasts until the insurance policy expires

• It lasts until the claim is made

• It lasts for the entire lifetime of the insured

• It lasts for the entire lifetime of the insurer