§22: insurance is a contract to indemnify against loss, damage or liability from a contingent or unknown event.

§23: insurer = the one who indemnifies; insured = the one indemnified.

A bill already received is not contingent, so it cannot be insured.

Only pure risk is insurable.

Speculative risk = chance of gain or loss (stocks, a new business).

Insurance shifts the financial loss; it does not remove the risk.

Peril = direct cause of loss; hazard = condition that raises the chance or severity of loss.

Moral hazard = dishonesty; morale hazard = carelessness or indifference; physical hazard = a physical condition.

A&H perils: accident and sickness. §533: a wilful act excuses the insurer; negligence does not.

Loss exposure = a situation where loss is possible; it exists even if no loss ever occurs.

Medical bills → medical expense; lost income → disability income; daily-living help → long-term care.

STARR = Sharing, Transfer, Avoidance, Retention, Reduction. Insurance = transfer; self-funding = retention.

Chance, measurable, predictable, not catastrophic, large similar group, insurer may select.

Planned losses and small routine costs are not ideally insurable.

§250: contingent or unknown events, past or future, may be insured; §251: never a lottery.

§10110: yourself, those you depend on for support or education, those who owe you money.

§10110.1(a): financial expectation, or love and affection between close relatives; friendship alone is not enough.

Employer: insurable interest + written consent (§10110.1(c)); interest needed at issue, not at loss (§10110.1(f)).

Indemnity = make whole; no profit from a loss (coordination of benefits).

§10111: in disability insurance, liability = the sum the policy says it pays.

§331: intentional OR unintentional concealment allows rescission; §334: materiality = influence on the other party.

Underwriting order: gather information → evaluate and classify → decide.

§10384: no postclaims underwriting for hospital, medical or surgical coverage.

Adverse selection = high risks seek coverage more; the law of large numbers predicts group losses, not individual ones.