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B LAW402 (43)

Insurance Act Sections.doc

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Business Law
B LAW402
Elaine Geddes

Exclusions in the Insurance Contract FIRE INSURANCE 544(1) … the contract is deemed to cover the insured property (a) against fire, whether resulting from explosion or otherwise, not occasioned by or happening through (i)in the case of goods, their undergoing any process involving the application of heat, or (ii) riot, civil commotion, war, invasion, act of foreign enemy, hostilities, whether war is declared or not, civil war, rebellion, revolution, insurrection or military power; (b)against lightning, but excluding destruction or loss to electrical devices or appliances caused by lightning or other electrical currents, unless fire originates outside the article itself and only for the destruction or damage that occurs from that fire; (c) against explosion not occasioned by or happening through any of the perils specified in clause (a)(ii) of natural, coal or manufactured gas in a building not forming part of a gas works, whether fire ensues from the explosion or not. (2) Unless a contract to which this Subpart applies otherwise specifically provides, it does not cover the insured property against loss or damage caused by contamination by radioactive material directly or indirectly resulting from fire, lightning or explosion within the meaning of subsection (1). Conditions in the Insurance Contract PROHIBITED USE BY INSURED 2(1) The insured shall not drive or operate the automobile, (a) unless he is for the time being either authorized by law or qualified to drive or operate the automobile; or (b) while his licence to drive or operate an automobile is suspended or while his right to obtain a licence is suspended or while he is prohibited under order of any court from driving or operating an automobile; or (c) while he is under the age of 16 years or under such other age as is prescribed by the law of the province in which he resides at the time this contract is made as being the minimum age at which a licence or permit to drive an automobile may be issued to him; or (d) for any illicit or prohibited trade or transportation; or (e) in any race or speed test. REQUIREMENTS WHERE LOSS OR DAMAGE TO PERSONS OR PROPERTY 3(1) The insured shall, (a) promptly give to the insurer written notice, with all available particulars, of any accident involving loss or damage to persons or property and of any claim made on account of the accident; (b) verify by statutory declaration, if required by the insurer, that the claim arose out of the use or operation of the automobile and that the person operating or responsible for the operation of the automobile at the time of the accident is a person insured under this contract; and (c) forward immediately to the insurer every letter, document, advice or writ received by him from or on behalf of the claimant. (2) The insured shall not, (a) voluntarily assume any liability or settle any claim except at his own cost; or (b) interfere in any negotiations for settlement or in any legal proceeding. (3) The insured shall, whenever requested by the insurer, aid in securing information and evidence and the attendance of any witness and shall co-operate with the insurer, except in a pecuniary way, in the defence of any action or proceeding or in the prosecution of any appeal. Insurable Interest 545(1) No insurance agent may knowingly issue any contract for fire insurance on property situated in Alberta for an amount that with any existing contracts exceeds the fair value of the property or of the interest of the insured in the property. (2) Any insurer or insurance agent who knowingly effects, and any insured person who knowingly procures, insurance on any building or property, or interest in any building or property, against loss or damage by fire in excess of its insurable value is guilty of an offence. Persons insurable – Life Insurance 563 Without restricting the meaning of the expression "insurable interest", a person (the "primary person") has an insurable interest in the primary person's own life and in the life of (a) the primary person's child or grandchild, (b) the primary person's spouse, (c) any person on whom the primary person is wholly or in part dependent for or from whom the primary person is receiving support or education, (d) the primary person's employee, and (e) any person in the duration of whose life the primary person has a pecuniary interest. Motor Vehicle Liability Policies - Coverage of owner's policy 616(1) Every contract evidenced by an owner's policy insures the insured named in the contract (the "named insured") and every other person who with the named insured's consent drives an automobile owned by the named insured and that falls within the description or definition of automobile in the contract against liability imposed by law on the named insured or that other person for loss or damage (a) arising from the ownership, use or operation of any such automobile, and (b) resulting from bodily injury to or the death of any person and damage to property. Misrepresentation 513(7) No contract of insurance may contain or have endorsed on it, or be made subject to, any term, condition, … providing that the contract is avoided by reason of any statement in the application for the contract or inducing the insurer to enter into the contract, unless the term, … is limited to cases in which the statement is material to the contract, and no contract may be avoided by reason of the inaccuracy of any such statement unless it is material to the contract. (8) The question of materiality in any contract of insurance is a question of fact for the jury, or for the Court if there is no jury, and no … term, condition, … to the contrary contained in the application or proposal for insurance or in the instrument of contract or in any agreement or document relating to the contract of insurance has any force or validity. (10) This section does not apply to contracts of automobile insurance. Fire Insurance MISREPRESENTATION 1 If any person applying for insurance falsely describes the property to the prejudice of the insurer, or misrepresents or fraudulently omits to communicate any circumstance which is material to be made known to the insurer in order to enable it to judge of the risk to be undertaken, the contract shall be void as to any property in relation to which the misrepresentation or omission is material. MATERIAL CHANGE 4 Any change material to the risk and within the control and knowledge of the insured shall avoid the contract as to the part affected thereby, unless the change is promptly notified in writing to the insurer or its local agent; and the insurer when so notified may return the unearned portion, if any, of the premium paid and cancel the contract, or may notify the insured in writing that, if he desires the contract to continue in force, he must, within 15 days of the receipt of the notice, pay to the insurer an additional premium; and in default of such payment the contract shall no longer be in force and the insurer shall return the unearned portion, if any, of the premium paid. Life Insurance Disclosure of material facts 567(1) An applicant for insurance and a person whose life is to be insured must each disclose to the insurer in the application, on a medical examination, if any, and in any written statements or answers furnished as evidence of insurability, every fact within the applicant's or person's knowledge that is material to the insurance and is not so discl
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