1 Key to the case study in Chapter 6  Indemnity is the cost of replacement less wear and tear. In this case, the cost of replacement is $1000. The life of the TV set was agreed at 15 years and as it is 5 years old, it has gone through one third of its life. The insured is therefore entitled to two thirds of the replacement cost.  The wear and tear of the TV set: 1000 × 1/3 = $333  The claim payment: = $667  Therefore the insurance company should pay $667 to the insured.

Chapter 7 Insurance Contract

3 Contents 1. Meaning of general contract 2. Meaning of insurance contract 3. The form of insurance contract 4. The subject, the object and content of insurance contract 5. The contents of insurance contract 6. The feature of insurance contract

4 1. Meaning of general contract It is a legally binding agreement. In other words, a contract must be enforced or recognized by law.

5 A valid contract needs the following elements Five elements Five elements Form required by law Form required by law Intention to create legal relations Intention to create legal relations Consideration Agreement Contractual capacity Contractual capacity

6 3. The form of insurance contract Four kinds Insurance certificate Insurance certificate Cover note Proposal form Proposal form Insurance policy Insurance policy

7 Endorsement of Motor vehicle Insurance Original policy of Marine cargo Insurance Endorsement of Marine cargo Insurance

8机动车辆费率计算 PICCCPICPAICC

9 Subject of insurance contract Privies ApplicantInsurer Persons who relate Indirectly to Insured, Beneficiary Insurance agent Insurance broker The subjects of insurance contract

10 The object of insurance contract

11 5. The contents of insurance contract 5.2 The main contents of the insurance policy  the name and address of the insurerthe name and address of the insurer  names and addresses of the applicant and the insured  the subject matter of insurance  scope of the cover and exclusions  period and commencement of insurance liability  insured value / the sum insured  premium and method of premium payment  method of payment of indemnity  the settlement of disputes  day, month and year of the signing of the contract

12 6.Principle of conclusion of insurance contract Principle Voluntary doctrine Consulting and discussing doctrine Fair and mutual doctrine

The novation of an insurance contract Novation of the subject insurerapplicantinsuredbeneficiary

Transfer of rights of insurance contracts The subject-matter of an insurance contract is often transferred from one person to another.  a motor policyholder may sell his car to another.  insured under a household policy may sell his house. Limiting factors ： Insurance contracts cannot be assigned freely without the consent of the insurer except marine cargo policies. The ownership of marine cargo may change several times in the course of a voyage, but the risk does not change as the result of a transfer of the cargo.

15 7 、 Features of Insurance Contract Features Adhesive Contract Adhesive Contract Bilateral Contract Bilateral Contract Aleatory Contract Aleatory Contract Contract of Utmost Good faith Contract of Utmost Good faith Onerous Contract Onerous Contract

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