FIN 342 Lecture Notes - Lecture 6: Fair Market Value, Subrogation, Insurable Interest
Document Summary
Legal purpose: meets all legal other legal requirements. Unilateral: only one of the parties must perform. Contracts of adhesion: because the insurer writes the contract and you must take it or leave it : ambiguities in the contract are interpreted by the courts in favor of the insured, principle of reasonable expectation: Insured is entitled to the coverage they reasonably expected; exclusions must be conspicuous, plain and clearly stated. Indemnity (most insurance contracts: you own a home valued at ,000. You buy insurance in the amount of 250,000. Insurer agrees to pay no more than the actual amount of loss ( actual cash value : determining actual cash value: Replacement cost less depreciation: fair market value, broad evidence rule. Consider all relevant factors in determining actual cash value: exceptions to indemnity. Based on appraisal at time of contract (i. e. for jewelry, artwork)
