37.1 b a c kn e x t h o m e Chapter 37 Objectives Identify important terms used in insurance. Explain who may obtain insurance. List the five aspects of the law of contracts that have special significance for insurance contracts. © 2002 West Educational PublishingTo accompany Law for Business, 14e, by Ashcroft and Ashcroft

37.2 b a c kn e x t h o m e Insurance Terms  Insurance - a contract that, for a fee, transfers risk of financial loss.  Insurer - the company issuing an insurance policy.  Insured - the person protected against loss.  Beneficiary - the person who received the proceeds of life insurance policy.

37.3 b a c kn e x t h o m e More Insurance Terms  Policy - a written contract of insurance.  Premium - consideration paid by the insured.  Risk or peril - danger of loss.  Hazards - factors contributing to risk.

37.4 b a c kn e x t h o m e Types of Insurance Companies  Stock companies The original investment was made by stockholders with a board of directors conducting business.  Mutual companies Policyholders are the members and owners.

37.5 b a c kn e x t h o m e Who May Be Insured?  May judicially declared insane persons contract for an insurance policy?  May a minor assert that insurance is a necessity and contract for it?  Ordinarily, would a next-door neighbor have an insurable interest in you? Why or why not?  No  No  Not unless that neighbor would somehow incur a financial loss because of you. Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss

37.6 b a c kn e x t h o m e Insurable Interest in Property Explain how each of the following could have an insurable interest in someone’s property: Mortgagor Lender Partner Bailee Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss Let’s Discuss

37.7 b a c kn e x t h o m e Legal Aspects of the Insurance Contract Explain each of the following: 2. Representation 4. Subrogation 3. Warranty 5. Estoppel 1. Concealment Quick Quiz Quick Quiz Quick Quiz Quick Quiz Quick Quiz Quick Quiz Quick Quiz Quick Quiz