Understanding Insurance Law
An insurance policy is a contract in which one party agrees to indemnify another against a predefined category or classification of risks in exchange for a premium. Depending on the insurance contract, the insurer may promise to financially protect the insured from the loss, damage, or liability stemming from some occurrence or event. An insurance contract will always limit the amount of monetary protection available.
In the absence of a contract for insurance, three possible individuals bear the burden of an economic loss: the individual suffering the loss; the individual causing the loss via negligence or unlawful conduct; or lastly, a particular party who has been allocated the burden by the legislature, such as an employer under Workmen’s Compensation statutes or a property owner pursuant to the doctrine of premises liability.
Although the types of insurance vary widely, their primary goal is to allocate the risks of a loss from the individual to a great number of people. Each individual pays a “premium” into a pool, from which losses are paid out. Regardless of whether the particular individual suffers the loss or not, the premium is not returnable. Thus, when a building burns down, the loss is spread to and shared by the people contributing to the pool. In general, insurance companies are the guardians of the premiums. Due to the importance in maintaining economic stability, our government and the courts use a heavy hand in ensuring insurance companies are regulated and fair to the consumer.
Insurance Law is the body of law that includes insurance policies, insurance claims, insurance regulations enacted by the state and federal government. Insurance law can be broken down to three basic categories: the business of insurance, the content of insurance policies, and the handling of claims.
The Business of Insurance is the category of insurance law that regulates companies wishing to operate in the insurance industry. These laws vary widely from state to state, but can affect things like ensuring the insurance company has sufficient liquidity to cover claims in the event of natural disasters or catastrophic events. These laws also govern licensing insurance companies, regulating who insurance companies can turn away from coverage, the types of insurance a company must offer in a jurisdiction if it wishes to offer other policies, and many others.
Content of Insurance Policies is the category of insurance law related to the substantive content of insurance policies. These laws are designed to prevent predatory practices that would essentially let insurers offer worthless or diminished value policies. They also prevent insurers from misleading clauses and titles on policies that would allow an unsophisticated buyer to believe that s/he is buying one type of insurance but receives another. These laws also govern other provisions, like reasonable cancellation, disclosures to third parties, and delineations of insured and uninsured events.
Claims Handling is the category of insurance law that affects how insurance companies respond when a claim is made. These laws: (1) prevent insurance companies from denying claims unreasonably; (2) affect how insureds can make claims and govern what happens if someone attempts to make a fraudulent claim; and (3) prevent insurance companies, in certain instances, from canceling or voiding policies simply because an insured made a claim or claims.
Property insurance provides protection against risks to property, including fire, theft and weather damage. It includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, or boiler insurance. Property is insured in two main ways: All-Risk and Named Perils policies.
All-Risk policies cover all the causes of loss not specifically excluded in the policy. Common exclusions in All-Risk policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism, and war. Named perils require the actual cause of loss to be listed in the policy for insurance coverage to be provided. The more common named perils include such damage-causing events as fire, lightning, explosion and theft.
Liability insurance is to protect the purchaser of the insurance, the “insured,” from risks of liability imposed by lawsuits and similar claims. It protects the insured in the event he/she is sued for a claim that is covered by the policy of insurance. Liability insurance provides protection against third party insurance claims, i.e., someone suffering loss who is not a party to the insurance contract. In general, damage caused intentionally, as well as contractual liability, are not covered under liability insurance policies. When a claim is made, the insurance carrier has the duty and right to defend the insured. The legal costs of a defense normally do not affect policy limits unless the policy expressly states otherwise; this general rule is useful because defense costs can be expensive when cases go to trial.
First-Party Coverage Cases
These cases can involve a wide range of coverage issues including: concurrent causation; wind v. flood; sinkhole v. earth movement; rescission, construction defects, and trigger of coverage. We have extensive experience in handling these cases throughout Florida and Georgia. This type of case ranges from a large commercial loss involving millions of dollars to simple homeowner’s claims.
Fraud and Arson
Insurance fraud costs policyholders and the insurance industry billions of dollars every year. Insurance fraud is also estimated to be the second largest economic crime in America, exceeded only by tax evasion. We have investigated and litigated all types of insurance fraud, including:
Large scale commercial arson fires
Total loss residential arson fires
Residential and commercial burglaries
Substantial commercial vandalism claims
Claims involving the mysterious disappearance of property/ automobiles
Claims involving stolen/damaged artwork
Legitimate catastrophic property loss claims where the insured seeks policy proceeds for damage unrelated to the catastrophic event
Claims involving application fraud
Claims involving underwriting/premium fraud
Claims involving broker and managing general agent issues