Week 7 (Legal Principles) What are the meanings of the four legal principles for Insurance contracts (principle of indemnity, principle of insurable Interest, principle of utmost good faith, and principle of subrogation)? Make sure you know their applications as well. What are the two purposes of the principle of indemnity? What the few exceptions to this principle discussed in class? (in other words, what is a valued policy? What is replacement cost? Why is life insurance a valued policy?) What is actual cash value? Make sure you know how to calculate actual cash value. When must insurable interest exist in life insurance? When must insurable interest exist in property insurance? What is representation? What is warranty? What is the consequence of making material misrepresentation and/or concealment? What is the consequence of violating warranty? What are the meanings of the four requirements of any legal contact (offer and acceptance, consideration, legal purpose, and competent parties)? What are the meanings of the five distinct legal characteristics of insurance contract (Aleatory contract, unilateral contract, conditional contract, personal contract and contract of adhesion)