1 Place each principle on the event timeline
The decision changes before inception, during cover, at loss and after indemnification.
Formation and cover: good faith and interest
- Utmost good faith concerns material information relevant to risk assessment, not merely whether the insurer asked a specific question. Exam
- Insurable interest asks whether a person suffers a legal or economic disadvantage when the subject matter is damaged. Definition
- The required timing of insurable interest can vary by class of insurance; do not transfer one class's rule mechanically to another. Trap
重要性
Separate facts affecting acceptance, terms or premium from facts unrelated to the risk.
Loss and recovery: cause, indemnity, subrogation and contribution
- Proximate cause is the dominant effective cause, not necessarily the event nearest in time. Trap
- Indemnity restores the pre-loss financial position and prevents profit from loss. Definition
- Subrogation concerns recovery from third parties after indemnification; contribution allocates a shared indemnity loss across policies. Compare
快速分類
Think subrogation for a responsible third party; think contribution for multiple policies covering the same loss.
Sequence of four principles
| Stage | Principle | Question |
|---|---|---|
| Cause | Proximate cause | What dominated the loss? |
| Measurement | Indemnity | What is the financial loss? |
| Recovery | Subrogation | Can a third party be pursued? |
| Multiple policies | Contribution | How is the loss shared? |
