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 legislation
Long Term Insurance Act
Short Term Insurance Act

4. 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

5. 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

6. 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

7. Types of insurance
Indemnity insurance
Non-indemnity insurance

8. 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

9. 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

10. Good faith
The concept of ubermae fides

11. Warranties
Affirmative warranties
Promissory warranties

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

13. 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

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

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