Topic: Insurance

Steve has taken an insurance policy to cover his 1940 house. At the time of application, the insurer "Home Protection Insurer" asked a number of questions in relation to the house including how the house was built and the structural integrity of the house.

In response to these questions, in part due to a lack of understanding, Steve responded that the house was built from concrete blocks. However, Steve has built the property with straw bale supported by concrete. Steve leaves the question on structural integrity blank.

One month after obtaining the policy there is a severe storm which causes damage to the house as well contents. Steve seeks to rely on the insurance policy.

Required:

1. Advise Steve whether he will able to rely upon his insurance policy. Support your answer with relevant cases and legislation.

2. Assume that Steve has correctly answered all questions within the insurance policy application. Then assume that Steve has another policy that covers his house at the same time as having applied for this one. When the damage occurs Steve aims to rely on both policies to profit. What are the limitations (if any) to Steve doing this?

3. With reference to relevant material, including legislation and case law, explain what the term ‘indemnity' means and how this is applied in insurance law. You may make reference to the above question but it is not essential.

You do not need to divide your efforts equally between questions but ultimately within the word limit provided you need to ensure that you have consistently and thoroughly explored and answered each question. The marks allocated for each question should guide you in relation to relative importance of that question to the assignment and this should assist you in determining the time you need to spend on the each question as well as the length of your response. In answering all questions you must support your answer (as far as practicable) with relevant and appropriate cases and legislation