Debtor-Creditor: Insurance

Question 1

What gives a person an insurable interest?

Answer 1

1. written lease on commercial business premises constitutes an insurable interest in real estate.
2. contract to purchase land gives an insurable interest as a contract purchaser.
3. holding of a mortgage on residential real estate likewise gives an insurable interest in property.

Question 2

Is an insurance policy void if purchased before the insured has an insurable interest?

Answer 2

No, but the insurable interest on property must exist at the time a loss is sustained.

Question 3

The requirement of an insurable interest has its origins in…

Answer 3

wagering statutes.

Question 4

Can a person maintain life insurance on their spouse after divorce?

Answer 4

Yes, regardless of whether alimony or child support payments are being received.

Question 5

What event will bar recovery from an insurance company?

Answer 5

Failure to notify the insurer of a potential claim will bar recovery since the insurance company’s ability to reduce or defeat the claim may be materially impaired.

Question 6

Is there generally a right of subrogation with respect to malpractice claims?

Answer 6

No.

Question 7

Is gross negligence necessary to prove malpractice?

Answer 7

No, only mere negligence.

Question 8

life insurance coverage is allowed for…

Answer 8

1. life insurance coverage on one’s own life, on blood relatives, and on legal or economic dependents.
2. A business is economically dependent upon its key persons and therefore may maintain “key-person” life policies on their lives.

Question 9

Is an insurance company entitled to recover the claims it paid to A?

Answer 9

Only if an insured (A) releases the wrongdoer (B), does A give up any claim for recovery under the insurance policy.