Insurance--02Selection And Control Of Risks

Front 1

Defenses of Insurer

Back 1

-concealment
-misrepresentation
-conditions
-warranties
-limitations or exceptions to coverage

Front 2

Misrepresentation--generally

Back 2

IN order to vitiate the an insurance policy on the ground of a misrepresentation:
FIRM K
Insurer must show:
1. the falsity of the statment (oral or writtent; express or implied) challeneged AND
2. the applicant/insured knew of the falsity
3. the statement was material to the risk
4. The statement was made with the intent to defraud the insurer
5. the insurer relied upon the statement by the insurer in issuing the policy.

Front 3

Misrep wrt life insurance

Back 3

The applicant must knowingly make a false statement regarding a matter material to the risk with the intent to deceive or mislead the insurer and the insurer must then rely upon the statement.

for life insurance: the insurance must challenge the truthfulness of the statement during the lifetime:

(1) of the insured
AND
(2) the first two years of the policy pursuant to the applicable SC Statute.

AND

insurer is NOT required to show a causal connection between the material misrepresentation and the death in order to void the policy.

Front 4

Material--defined

Back 4

a misrep s material if it induced the insurer to enter into a K it would have otherwise refused or to accept a K at a lower premium than it would have otherwise required

Front 5

obligation of insured to correct a representation

Back 5

if the statement becomes false, before the K is formed then insured must correct.

if the statement becomes untrue after the K, then no duty to correct.

Front 6

practical effect/remedies of misrepresentation

Back 6

if the misrep is fraudulent, policy is vitiated and insurer get to keep premium.

Front 7

Representations by Agents/3P

Back 7

representations of insurer's agent binding

misrep by insured's 3P i.e. wife not binding even if materially false and relied upon

Front 8

Renewals

Back 8

considered to be on the basis of the represenations made re the original policy. Thus there is a duty on the insured to inform the insurer of any material changes

Front 9

Warranty/Condition

Back 9

representations or promises byt he insured, incorporated into the K and sale, on the truthfulness or fulfillment of which it is agreed that the promise of the insurer shall depend.

Front 10

Warranty v. Representations

Back 10

Burden of Proof: insurer must prove materiality of misrep to avoid the K, whereas materiality of a warranty is "conclusively presumed"

Front 11

how a rerpesentation becomes a warranty

Back 11

1. rep/promise must be EXPRESSLY INCLUDED, or incorporated by clear reference into the K document.
2. K must clearly shoe that the PARTIES INTENDED that the rights of the insured would depend on the truth or performance of the warranty or condition

There must be a clear statement within the written contract to the effect that the insured warrants teh truth of statements under penalty of loss of right under the K.

Front 12

Affirmative Warranty

Back 12

statement concerning a fact as of the time the K is entered into--nothing more

Front 13

Promissory Warranty

Back 13

makes a statement or promise about the future of continuting truth of the matter presented.

Warranties are presumed to be affirmative unless it is clearly shown to be promissory

Front 14

Divisibility of an Insurance K

Back 14

K may divisible where the property consists of different items which are separately valued or insured for separate amounts.

If a K is divisible the breach of W or condition as to one item will not affect the insurance on the remainder of the property even if the premium is entire.

Front 15

temporary breach of warranty

Back 15

if insured does not take action to void policy, before the breach is cured and the risk is not substantially increased during the period of he breach, the policy is suspended during the breach and renewed upon the curing of the breach.