Chapter 27 - Insurance law. The learning objectives for this chapter include: Explain contractual relationship between insurer and insured; learn how to interpret policy clauses; understand insurance terminology and concepts: subrogation, insurable interest, coinsurance, bad faith, duty to defend; identify types of liability insurance. | Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 5 Personal Property and Bailments Real Property Landlord and Tenant Estates and Trusts Insurance Law Property P A R T Insurance Law P A E T R H C 27 If anything can go wrong, it will. Anonymous (1950s) known as Murphy’s Law Learning Objectives Explain contractual relationship between insurer and insured Learn how to interpret policy clauses Understand insurance terminology and concepts: subrogation, insurable interest, coinsurance, bad faith, duty to defend Identify types of liability insurance Each day, every person and every business faces the risk of physical and financial loss In an insurance agreement, the party who would normally risk a particular loss (the insured) transfers – along with consideration (the premium) – that risk to another party (the insurer) which bears financial consequences if the particular risks materialize in the form of actual events (perils) Overview An . | Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 5 Personal Property and Bailments Real Property Landlord and Tenant Estates and Trusts Insurance Law Property P A R T Insurance Law P A E T R H C 27 If anything can go wrong, it will. Anonymous (1950s) known as Murphy’s Law Learning Objectives Explain contractual relationship between insurer and insured Learn how to interpret policy clauses Understand insurance terminology and concepts: subrogation, insurable interest, coinsurance, bad faith, duty to defend Identify types of liability insurance Each day, every person and every business faces the risk of physical and financial loss In an insurance agreement, the party who would normally risk a particular loss (the insured) transfers – along with consideration (the premium) – that risk to another party (the insurer) which bears financial consequences if the particular risks materialize in the form of actual events (perils) Overview An insured is the person who acquires insurance on real or personal property or insurance against liability, or, in the case of life or health insurance, the person whose life or health is the focus of the policy, but the person to whom the insurance proceeds are payable is the beneficiary Except for life insurance, the insured and the beneficiary generally are the same Specifics of Insurance Insurance policies must satisfy all of the elements required for a binding contract Person makes application (offer) to insurance company for insurance coverage If the insurance company accepts the offer, an insurance contract arises Insured’s initial premium payment and future premium payments furnish consideration for the insurer’s promises of coverage Specifics of Insurance State law governs whether insurance contracts are covered by the statute of frauds Once written, the policy generally is enforceable as written If a dispute arises over policy language, courts interpret the provisions as an
