MISREPRESENTATION IN INSURANCE; INSURABLE INTEREST; INDEMNITY AND UBERRIMAE FIDEI

a) Advise whether an insurance company or its agent or both can be sued for misrepresentation on a proposal form and whether the insured can succeed in a claim.
b) Discuss the law of insurable interest
c) Discuss the doctrines of indemnity and uberrimae fidei.

AUTHOR: KATALILO JOY

INTRODUCTION
This paper is aimed at discussing the effect of misrepresentations on an insurance proposal form, the law of insurable interest and the two doctrines of Uberrimae fidei and indemnity.

a)
Facts
Ms. Loveness Fyurila decided to insure her car. She gave answers, as a proposer, to questions on the insurance proposal form orally to an agent of the insurance company. The agent in recording the answers on the proposal form did it incorrectly. The proposer then signed the form which stated that it was the basis of the contract and that she warranted the truth of the statements contained in it.
Later she claimed on the insurance and the insurance company repudiated liability on the ground that there had been a misstatement in the proposal form.

Issue(s)
i) Can the proposer commence legal proceedings against the insurance agent or the insurance company or both? ii) What are the chances of her claim being successful?

The Law
- The agent of an insurance company becomes the agent of the proposer in the exercise of completing a proposal form.
- A warranty in insurance is a term upon breach of which the insurer is discharged from all liability as from the date of the breach.
- The parties to an insurance contract should disclose all material facts

Case analysis
An insurance contract is a contract whereby the insured transfers a risk he owns to the insurer at a consideration known as a premium. The insurance contract is part of an insurance policy with other documents among which a proposal form is present. A proposal form is the basis of the insurance contract in that it is on the proposal form that basic information