1. INSURANCE LAW

2. Definition
A contract between an insurer and the insured in terms of which the insurer undertakes, in exchange for the payment of a sum of money (the premium), to give to the insured a sum of money (or its equivalent) on the occurrence of a specified but uncertain future event in which the insured has some interest

3. Insurance vs Wagering What makes insurance different from a wager?
A wager is unenforceable (contra bones mores)
Insurable interest
Intention
Risk of loss (not self created)

4. Insurance legislation
Long Term Insurance Act
Short Term Insurance Act

5. Types of insurance
Indemnity insurance
Non-indemnity insurance

6. The 4 essential elements
The insurers obligation to pay a sum of money or its equivalent
The insured's obligation to pay the premium
The occurrence of an uncertain future event
An insurable interest

7. Duties
Good faith Disclosure Brokers duty to advise disclosure Notify of loss Co-operation Mitigation of damages Not to impair subrogation rights To pay the premium

8. Insurable Interest
The insured must have some kind of interest in the thing being insured
Eg: economic interest
This is what distinguishes the insurance contract from a wager or gambling

9. Indemnity insurance
There is uncertainty as to whether the insured event will ever occur
Eg: a hijacking, a car accident, a fire
The amount of the loss (if any) is unknown at the time of taking out the policy
The insured must have an insurable interest in what is being insured

10. Non-indemnity insurance
It is certain that the event will occur – the only uncertainty is when
Eg: a persons death
The amount the insurer must pay is decided at the time the insurance is taken out & is not related to the loss
The insured must have an insurable interest in the life of the person being insured

11. Good faith
The concept of ubermae fides

12. Warranties
Affirmative warranties
Promissory warranties

13. Affirmative warranties
A declaration
Eg: Age last birthday
Materiality

14. Promissory warranties
A promise or undertaking
Eg: The insured must arm the alarm system whenever leaving the property unattended
Does not have to be material

15. Under & over insurance Over insured – no benefit to insured
Under insured – insurer will apply average

16. Subrogation Places insurer in shoes of insured
Allows insurer to sue in insured’s name
Cannot benefit twice from your mishap

17. Some principles Right to repair, replace etc Excess clauses
Multiple contracts