Mannings Six Principles of General Insurance: Questions & Answers

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Chapter 3

Q3. 1

The term ‘subrogation’ literally means:




Q3. 2

What is an ex gratia payment?




Q3. 3

When an insurer has paid a loss brought about by the negligence of the Insured or a third party covered by the policy, the insurer has no claim against the Insured for damages.



Q3. 4

The insurers of a landlord and tenant are not entitled to subrogation.



Q3. 5

The doctrine of subrogation usually applies to indemnity insurance, and is generally not applicable to personal accident policies or life insurance.



Q3. 6

When it comes to insurance law, subrogation is strictly a common law principle.



Q3. 7

Subject to the written terms of the policy, generally two conditions need to be fulfilled before an insurer can exercise a right of subrogation. These conditions are that (i) the insurer must be liable for the relevant loss, and:




Q3. 8

An insurer is nonetheless entitled to exercise its rights of subrogation if the contract with the Insured is void.



Q3. 9

An insurer's right of subrogation against a third party may be affected by the written or implied terms of any existing contract between the Insured and that third party.



Q3. 10

Express terms are:



Q3. 11

Circuity of action arises in a situation where:




Q3. 12

Generally, the courts will recognise an implied term even if it is inconsistent with an express term contained in the policy.



Q3. 13

Equity is the name given to the set of legal principles that supplement the English common law tradition and focus on issues of fairness.



Q3. 14

It is unusual for parties to an insurance contract to exclude or restrict the rights of the insurer under the doctrine of subrogation.



Q3. 15

After the Insured has been indemnified, a significant issue is how the proceeds of any recovery against third parties are shared between Insured and the insurer.



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