Term
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Definition
| An agreement which is legally enforceable. Insurance policies are contracts which transfer risk from the insured to the insurer. |
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Term
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Definition
- Parties with the mental capacity to understand the terms agreed upon
- Legality of purpose
- Mutual consent
- An exchange of consideration
*Consideration: what each party promises to give in exchange for what is promised to be rcvd. |
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Term
| In whose favor do courts interpret vague terms and phrases in insurance policies? |
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Definition
| The insured - the insurance company is the sole drafter of the insurance policy rather than insured/insurer negotiating. If put into force, the insured accepts the policy "as is," so civil courts favor the party that did NOT draft the contract. |
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Term
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Definition
| Insurance policies required the insured to meet specific requirements (duties of the insured) before he/she can receive a loss settlement. |
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Term
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Definition
| Individuals, companies, and other business entities |
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Term
| What authority does an agent have? |
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Definition
Under the concept of LAW OF AGENCY: agent acts on behalf of principle. The principle grants certain authority to the agent to act (adjust claims, sign forms, etc)
1. Express Authority
2. Implied Authority
Apparent Authority |
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Term
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Definition
| aka "stipulated authority" is authority that is spell out in agreement b/w the priciple and the agent |
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Term
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Definition
| aka "incidental authority" - the authority that the agent reasonably believes he/she has based on the action of the principle |
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Term
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Definition
| aka "ostensible authority" - authority that the public reasonably believes the agent posseses |
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Term
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Definition
Legal prohibition. If an agent makes a statement to another, then the principle cannot later contradict the agent's statement. The principle has waived its right to assert a fact that is inconsistent with the agent's assertion.
Ex: If an agent tells an applicant that a certain peril is covered and the applicant buys the policy, the insurance company would be ESTOPPED from denying that claim. They, instead, would pay the claim and then possibly take action against its own agent. |
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Term
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Definition
aka "actual damages" - designed to compensate the paintiff for the loss due to the harm caused by the defendant.
*special dmgs: compensate the plaintiff for losses that can be estimated aka economic dmgs
*general dmgs: compensate for losses that CANNOT be specified (diminishment of quality of life, etc) aka non-economic dmgs. |
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Term
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Definition
| awarded in addition to compensatory dmgs--designed to punish the defendant and encourage any future wrongdoing. |
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