Select Page

Insurance Law
South Texas College of Law Houston
Wilks, William Lee

Insurance is a devise for transferring risk by contract.
Insurance company transfers the risk – an agent for distributing risk of loss –
Principles of Indemnity – to make you whole again – to indemnify you –
Except: life insurance
-an element of gamble – die after first payment
-have to have an insurable interest –
-Annuities are the opposite – insurance company is betting you die early.  
Three kinds of insurance:
1. Property loss – 1st party insurance for your loss
Ex: fire policy pays you if your property is lost by fire -covers windstorm, but not all fires (not friendly fire) Hostile fire- not where it is supposed to be –
Ex 2 of first party insurance: life insurance – I own it, my life is insured.  
Individual or a Group Policy –
Individual is by myself –
Term Insurance –
-ordinarily five years
-no cash values
-if renewable ,then can renew it
Level term – after five years, $10,000 policy  
– renew it and premium goes up @ renewal
– keeps same amount of coverage
Decreasing term – keep same premium but less coverage
Mortgage insurance – = decreasing term insurance – (pays off mortgage if you die) and mortgage is decreasing –  
Ordinary life (whole life insurance) = one premium
until you die – builds up cash value – becomes an investment – If young, could get single premium but usually paid in installments –  
Renewable term –
Adverse situation – A.S. – a renewable term policy – decide not to renew but health is bad so they will renew – only sick people buy the insurance –
Ex. 2 – flood insurance for people who live at the top of Pike’s Peak –  
Third party insurance – liability insurance covering us for injury we cause to third parties.
-legal malpractice
-worker’s comp
-products liabilty
-Homeowner’s policy may have property and liability . Even life may combine term and whole life. 
Pg 835 – Whole life policy –
Non-participating = no dividends – (claim it is cheaper)
-some policies are participating – you get dividends
-Insuring agreement – usually gives you 10 days 
Pg 836 – Face sheet – = policy specs –
-premium class – many be rated based on certain disabilities –
PPO – policy purchase option = buy a right to buy add’l policies without a medical exam –
-Schedule of Benefits and Premiums – adjustment provision – can never exceed this amount  
Table of values – @ 10 years, can borrow $8,500 at …- if don’t pay it back, then it comes out of the proceeds – or 2; cash it for the CSV
– or 3; single payment for amount of CSV for a paid up policy –
– or 4; keep original face but pay no more – so, this is converting it to a term policy – for ten years with
no additional premium. 
Application is part of the contract – if a misstatement, then it is void –  
-Insurance company

But, if I am driving your car, your insurance pays first – my company pays any excess over any other insurance – also,your policy pays defense costs –  
Exclusions – not covered for intentional acts – Insurance company has to pay for the defense –  
Public conveyance – mau cause you a problem if used as a taxi  
Pg 846 – driving your car without permission is not covered –  
Pg 847 – Part B – Medical coverage – someone occupying your vehicle – necessary medical and funeral expenses – also family members if hit by car 
Pg 848 – Part C – Uninsured motorists – “Hits” – not if it just forced you off the road – otherwise, people would always say truck ran them off the road –  
Limits of liability – wants to stack uninsured motorist coverage for two cars – anti-stacking provision
-Underinsured coverage –
Pg 849 – Coverage for damage to your auto – not collision but other damage –
Subrogation – right to recover what they paid out
-Policy period and territory – – not Mexico – have to have a separate policy –
-Termination required by statute  
Pg 818 Basic Standard Fire Policy –
-required by statute
-actual cash value