ASSIGNMENT ANSWER THE FOLLOWING QUESTIONS I. Jake borrowed $800,000 from the Gat
ID: 1170730 • Letter: A
Question
ASSIGNMENT ANSWER THE FOLLOWING QUESTIONS I. Jake borrowed $800,000 from the Gateway Bank to purchase a fishing boat. He keeps the boat at a dock owned by the Harbor Company. He uses the boat to earn income by fishing. Jake also has a contract with the White Shark Fishing Company to transport tuna from one port to another. a. Do any of the following parties have an insurable interest in Jake or his property? If an insurable interest exists, explain the extent of the interest. 1. Gateway Bank 2. Harbor Company 3. White Shark Fishing Company b. If Jake did not own the boat but operated it on behalf of the White Shark Fishing Company, would he have an insurable interest in the boat? Explain. Il. Ashley purchased a dining room set for S5000 and insured the furniture on an actual cash value basis, Three years later, the set was destroyed in a fire. At the time of loss, the property had depreciated in value by 50 percent. The replacement cost of a new dining room set at the time of loss was S6000. Ignoring any deductible, how much will Ashley collect from her insurer? Explain your answer III. Nicole is applying for a health insurance policy. She has a chronic liver ailment and other health problems. She honestly disclosed the true facts concerning her medical history to the insurance agent. However, the agent did not include all the facts in the application. Instead, the agent stated that he was going to cover the material facts in a separate letter to the insurance company's underwriting department. However, the agent did not furnish the material facts to the insurer, and the contract was issued as standard. A claim occurred shortly thereafter. After investigating the claim, the insurer denied payment. Nicole contends that the company should pay the claim because she answered honestly all questions that the agent asked. a. On wha payment of the claim? b. What legal doctrines can Nicole use to support her argument that the claim should be paid? t basis can the insurance company deny IV Stephanie owns a small warehouse that is insured forExplanation / Answer
1) An insurable interest is a stake in the value of an entity or event for which an insurance policy is purchased to mitigate the risk of loss. Entities or events not subject to financial loss do not have an insurable interest
from the defination/meaning of Insurable interest it is clear that only those entities that are subject to financial loss have insurable interest others don't have.
Therefore
1)
a) Gateway Bank have insurable interest to the extent of Loan given and not repaid
b) Since Jake did not own the boat but he operated only on contract basis, he will not have insurable interest.
2) Since the policy taken is on actual cash basis, so Claim is based on remaining depreciation value
Given Depreciated Value 50% and remaining value 50% = 5000*50% = 2500 is insurance claim
3)