Quiz 36: Insurance


Mr. K was injured during a painting work in his house when his wife MS. TH has sprayed water on the roof from which he fell off of the roof and got injured. For this reason he filed a lawsuit under his wife's homeowners' policy against LPI an insurance company. Though they were married, they have been separated since about 4 months, but they were not divorced. He testified that he lives in that house for many years and owned it. According to the homeowners' policy, the insurance coverage is applicable for the people residing and relatives of the insured person. But the LPI disagreed to provide the insurance. Homeowners' insurance policy: this policy provides coverage over the liability coverage for injuries and accidents that occurs in the premises of the insured house.it also provides protection for the family members and relative who are living with the insured person. In this situation, Mr. K is the person living with the insure person (MS. TH) even though they were separated but not divorced hence legally she is his wife and can have the insurance claim under her name as a insure person. Therefore, he has the right to claim the insurance under the homeowners' policy as the injuries are caused in the home premises of the insured person.

Refer to the case Mount Vernon Fire Insurance Co. v Belize NY, Inc Case Issue The facts to this case are: • B , a construction company, was sued by families and survivors of a gunman attack at one of their construction sites. • B 's insurer refused to indemnify or defend B on the lawsuit, stating that B was not covered for this under their insurance based on their exclusion clause. The issue is whether B is covered by insurance for the lawsuit gunman attack at their construction site. Relevant Terms, Laws, and Cases As discussed by the State Court of Appeals for this case, the court interprets insurance contracts only as to the intent of the clear language of the contract. Thus, the exclusion clause must be clear. Opinion The court held for B. They argued that : • The insurer intended the policy exclusive for coverage for carpentry work. • However, carpentry work is not defined in the contract. • Insurer did not use language to explicitly limit policy coverage to carpentry; they merely list the coverage as carpentry. • Instead, the policy states coverage for anything B is legally obligated to pay. Thus, the court held that the insurer must pay because of the lack of language limiting coverage only to carpentry work.

Refer to the case El Fenix v Serrano Guitierrez Case Issue The facts to this case are: • G has an insurance policy on a boat which covered confiscation by government agencies. • G later sold the boat to another person but continued to purchase insurance of the boat. • The bank that lent money for purchase of the boat did not perfected the security interest on the boat. • The boat was confiscated by authorities, both the bank and G claimed for insurance. The issue is who is entitled to the insurance. Relevant Terms, Laws, and Cases Security agreement - is a contract that has a security interest, collateral. • A creditor may loan money to the debtor with a property that belongs to the debtor as collateral. • In a mortgage to purchase a home, the home is the security interest to the bank. • Creditor with a perfected security interest has higher priority on a claim of collateral versus other creditors. Insurable interest - is required for an insured to have an enforceable insurance contract. • The insurable interest exists when the thing insured gives benefit to a person. • Such benefit will be a cost to the person if the thing is damage. • Examples include owners of a house, employer of an employee, personal health, etc. Opinion The court held that both G and the bank are not entitled to recover from insurance. They found that: • G and the bank had no insurable interest. • G was no longer the owner of the boat and G misrepresented his boat ownership when he applied for insurance. • The bank failed to submit to the relevant agency the mortgage application for their insurable interest. • Thus, the bank only had an unsecured loan to G but not on the boat. Hence, neither party can recover insurance.

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