Most insurance is sold through insurance agents. Insurance agents are frequently referred to as dual agents. That is, they are both an agent of the company that underwrites the insurance policy and also the person who applies for the insurance policy. To say that they are a dual agent means that they have certain duties to each party—certain duties to the underwriter and also certain
duties to the insured.
If you are a medical doctor, you most likely have a malpractice insurance policy covering you. That malpractice policy is a form of liability coverage that would apply in an instance where a patient sues you for malpractice. In that event, the malpractice insurance company would step in, conduct an investigation, and determine if the claim should be adjusted or negotiated. Some medical malpractice policies require the consent of the doctor before any settlement offers can be made. In the event the insurance company does not settle your patient’s claim, the patient may file suit against you. The insurance company would appoint an attorney to represent you and then would indemnify you as to any judgment up to the amount of your policy limits.
Another type of insurance coverage is homeowners insurance coverage. A homeowners policy typically includes a fire endorsement, which would cover you in the event that your house, including contents, burns down. It is important that you make sure that the stated value is consistent with the replacement cost or the fair market value of the house when reviewing this type of coverage. For instance, if you are in a geographical area where property values are increasing dramatically, then it is important that you likewise increase the covered amount under this provision of your homeowners policy to make sure that there is enough money paid to you in the event that your house does burn down. Likewise, within this type of policy there may be coverage for water damage, theft, and also for liability claims.
Liability may arise in a homeowner’s context when a guest is on your premises and is injured as a result of some defect on the premises. For instance, suppose there is a large hole in your backyard that is covered by overgrown grass and your guest falls into that hole and breaks an ankle. If you knew of the hole and did not disclose it, then the guest may have a basis for a liability claim against you alleging that there is negligence on your part. If a judge or jury were to agree with that, then the liability insurance policy would have to indemnify you up to your policy limits. Under this type of liability policy, the liability insurance carrier would also provide an attorney to defend you.
Under a homeowners policy, if there are specific valuable items of personal property that you wish to have covered, they normally have to be covered under a scheduled loss section of the policy where the specific items are identified. There may even be a requirement that an appraisal or pictures of the objects be provided as part of the insurance policy.
Another type of insurance coverage is health insurance. Health insurance contracts are frequently group insurance contracts wherein you, as a member of a group, pay a premium to the insurance company in return for the insurance company agreeing to cover medical and hospital expenses up to certain limits. The general limitation of the scope of coverage under these policies is that the treatment that you receive must be reasonable and necessary and the cost of the treatment must be consistent with the usual and customary charges for other practitioners in the area.
For instance, if you decide to have plastic surgery that is purely elective, this type of treatment may not be covered unless you have a special endorsement or provision within your policy that provides coverage since the treatment is not necessary. Likewise, if you choose to go to the most expensive orthopaedic surgeon in the area because you think he or she is the best, all of the charges rendered by that surgeon may not be covered under your policy. The policy is governed by what is usual and customary for those types of services and not necessarily by what the best practitioner in that area may charge.
Another form of insurance is life insurance coverage. A life insurance policy is simply a contract between you—the insured—and the insurance company wherein the insurance company agrees to pay a certain amount of benefits upon your death. Assuming that there have been no misrepresentations made by you in applying for this type of insurance coverage, then your survivors would simply make a claim to that insurance company upon your passing and the designated beneficiary will then receive the benefits due.
There are different types of life insurance coverage. The most common form of life insurance coverage these days is term life insurance. Term life insurance policies have no value other than the face amount of the policy and even then have no value unless the person who is insured passes away during the coverage period.
Another type of life insurance coverage is that of whole life coverage. This is actually a type of investment in which the value of the policy may increase over a period of time as you pay premiums. You may also be allowed to take loans against the policy and perhaps even redeem the policy for a fixed amount of money. The theory behind whole life is that you not only are insuring your life, but you are also making an investment that is increasing in value over a period of time that you may utilize by taking a loan against it or cashing it in.
In most life insurance policies, the application for insurance is included as part of the policy. The reason for that is that payments under life insurance policies are generally rather substantial. If there are any misrepresentations made in the application that may be a basis for voiding the insurance policy. Frequently those misrepresentations are not discovered until after the person has passed away and an autopsy has been performed.
The type of insurance coverage that you are probably most familiar with is automobile insurance coverage. An automobile policy may include several different forms of coverage. Within one policy there may be liability coverage, there may be medical expense coverage, there may be collision coverage, and there may be uninsured motorist and underinsured motorist coverage. Each of those types of coverage is dramatically different and each of them has a different objective.
Liability coverage is designed to protect you, the insured, in the event you are involved in a collision in which some other person is injured as a result of your alleged negligence. If a person is injured and they contend that you are negligent, then they may assert a liability claim against you for their medical expenses, lost wages, pain and suffering, resulting disabilities, disfigurement, etc.
Your liability insurance policy would cover you in that instance by providing you with an attorney to defend you in that claim and by indemnifying (reimbursing) you for any judgment rendered against you in that case up to your policy limits. If your policy limits are fifty thousand dollars, but the judgment entered against you is for five hundred thousand dollars, then your insurance company is only obliged to pay fifty thousand dollars. The remaining four hundred and fifty thousand dollars may come out of your pocket.
Also within an automobile insurance policy there may be comprehensive coverage. Comprehensive coverage is a type of first party coverage wherein you may make a claim against your own policy as a result of damage to your vehicle. If your vehicle was damaged in a collision and you do not wish to or cannot assert a claim against the other party (or if you were at fault), then you may make a claim against your own policy under your collision coverage. Your insurance company will then pay you for the repair cost of your vehicle. In the event your vehicle is totaled, it will pay you the fair market value for that vehicle. If someone other than you was at fault, your insurance company may then have a right of recovery against that other driver.
Most forms of collision coverage do carry a deductible. This means that you would only be compensated by your insurance carrier for the amount of money that exceeded your deductible amount.
Auto insurance coverage also offers what is referred to as medical expense coverage or personal injury protection coverage. This is a type of first party coverage wherein you may make a claim against your own insurance company for medical expenses incurred as a result of a collision. If you are injured in an automobile collision while in your car, you can make a claim against your policy for payment of your medical expenses to the extent that they were reasonable and necessary as a result of this collision. If you are a passenger in someone else’s vehicle, then, assuming there is medical payments coverage for the vehicle you are riding in, you can also make a claim for medical payments under that policy. You may be able to make a claim for medical payments under both your policy and the policy of the vehicle you are riding in.
Another form of coverage under a typical automobile insurance policy is uninsured motorist and underinsured motorist coverage. This is a very important form of coverage because it protects you in the event that you are involved in a collision that is the fault of an uninsured or underinsured motorist.
Example: Suppose you are hit from the rear by a vehicle that is uninsured and you are injured. You could sue the driver of that striking vehicle, but he or she may have no assets to pay any judgment that you may obtain against him or her. In that instance, your own uninsured motorist coverage would apply. In such an event your insurance company could essentially step in and defend that uninsured motorist, or at least take a position that is contrary to you, by challenging your claims for uninsured motorist benefits.
The same basic principle would apply if that striking vehicle was underinsured.
Example: Suppose the vehicle that struck you from behind has twenty-five thousand dollars in coverage but your medical expenses as a result of the collision are fifty thousand dollars. The
striking motorist would then be underinsured. If you got a judgment for your medical expenses, he or she may not be able to pay it. His or her insurance policy would pay the first twenty-five thousand dollars, but anything beyond that would be covered by your policy to the extent that you had underinsured motorist coverage.
Uninsured motorist coverage is a very broad form of coverage. Even if you are a bicyclist or a pedestrian struck by an uninsured motorist (or by a hit-and-run motorist), you may make a claim for and recover under your own uninsured motorist coverage.
If you are struck by a hit-and-run motorist, you may make a claim under your own uninsured motorist coverage.
An insurance policy is a contract. The parties to the contract are the insurance company and the insured. In addition, there may be a beneficiary or what may be referred to as a third party beneficiary of an insurance contract. In a life insurance policy, the beneficiary is the person who receives the death benefits upon the death of a person who was insured. In an automobile insurance policy, the third party beneficiary under a liability policy is the individual who was injured and who receives compensation from that liability insurance policy. The beneficiary or third party beneficiary is not a named party to the insurance contract, but is generally the person who is intended to benefit from the insurance policy. As such that beneficiary may have certain rights under the policy.
There are a variety of different types of insurance policies that can be written. The most common types of policies are liability, life insurance, and health insurance policies.
Workers’ compensation claims can be complicated when an individual has suffered an injury while employed with one company and then goes to work for another company and later reinjures him- or herself. Which employer is going to be responsible for that compensation?
Some states have set up what is referred to as a second injury fund. In these states, that second injury will be partially paid out of that second injury fund and then also partially paid by the second company. That second injury fund is a fund of money that is created by contributions from all of the different insurance companies that underwrite workers’ compensation insurance coverage in that jurisdiction.
A similar type of fund that may exist is the uninsured employer’s fund. An employer who has not taken out workers’ compensation coverage and who therefore cannot pay the benefits called for under the workers’ compensation act may still be covered in the sense that the employee may make a claim against the uninsured employer’s fund. To the extent that any payments are made out of that fund, the fund administrator or the attorney general of that state will typically make a claim against the uninsured employer in order to recover such payments.
\
If an employee is injured on the job as a result of the fault of some third person, then that employee may have a basis for a claim (sometimes referred to as a third party claim) against that other individual or company. For instance, suppose you are working on a construction job and you are employed by the general contractor. If, while performing those duties, an employee of a plumbing sub-contractor drops a pipe that strikes you on the head, you may be entitled to the benefits called for under the act. In addition to being compensated under the workers’ compensation act, you may also have a basis for a claim against the plumbing sub-contractor whose employee dropped the pipe on you. In some states, on a construction job such as this, all contractors may be immune from suit by any other employee on that construction job. In other states, the employee may sue any other responsible contractor on the job.
If the injured employee in that circumstance does recover money from the third party who caused the injury, then the employer of that injured worker (or more likely the employer’s insurance carrier) is entitled to recover all or part of the monies paid to the worker under the workers’ compensation act. This is a principle known as subrogation. Subrogation literally means that one party is subrogated or steps into the shoes of another party and acquires their rights.
Under most workers’ compensation acts, once the employee makes a claim for and receives benefits, then to the extent that the employee has any right of recovery against a third party, the employer or its insurance carrier acquires that right of recovery to the extent of wage and income benefits it paid to the employee. The purpose of allowing subrogation in this instance is to hold down the cost of workers’ compensation insurance coverage and further to prevent the employee from receiving a double recovery on the wages and medical benefits received.
If the employee receives compensation under the workers’ compensation act and is further compensated for the same injuries as a result of the third party civil claim, that constitutes a double recovery to the employee. After paying back amounts paid to him for wage and medical benefits under the workers’ compensation act, the employee is entitled to keep any excess damages awarded by a jury or received in settlement.
There also is a good bit of controversy regarding the provision of medical treatment to injured workers. Typically, the medical treatment is controlled by the employer or the employer’s insurance carrier. This means that the employee receives treatment from doctors who have been chosen by the insurance carrier or the employer. These doctors obviously know who is paying their bill and they know that the insurance carrier and the employer expect this employee to return to work at some point in time so that their financial exposure in paying wage benefits is limited. Although these doctors generally provide quality medical care for the injured employee, they have a somewhat mixed loyalty. They know that the employer and the insurance company want this employee to return to work, but they also know that it is not necessarily always in the employee’s interest to return to work too quickly or even to return to that form of work at all.
Enter keywords:
