MCS 3040 Study Guide - Insurable Interest, Subrogation, Life Insurance

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 3040
• Professor: Joseph Radocchia

Document Summary

Key consequence: insured has a duty to disclose to the insurer all information relevant to the risk; if she fails that duty the insurer may choose not to honour the policy. Can deny coverage for nondisclosure even if the loss has nothing to do with the matter that was left undisclosed. Law places this duty for the reason: o. Insurer has to be in a position to full assess the risk against which the insured wants protection. Duty exists at the time of applying for the insurance and throughout the duration of the contract. Insurer must be notified about any change material to the risk. Special nature of the insurance contract also means that its validity is contingent on the insured having an insurable interest in the thing insured. The test for whether the insured has an insurable interest is whether he benefits from its existence and would be prejudiced from its destruction.