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Insurance Law
University of South Carolina School of Law
Davis, William P.

INTRODUCTION
–         Mandatory insurance
o       Auto insurance is one of the few
o       Not home owners insurance, but banks require for mortgages
–         First party coverage – Making a claim against your own insurance provider
–         Third party coverage (also called liability coverage) – insurance provider pays for the injuries of a third party
o       25/50/25 means
§         25K is the amt for bodily injury for one accident (BI)
·        One passenger in your car
·        Policy pays up to 15K of your passenger’s BI
§         50K is the total paid for an accident per claim (BI)
·        Two passengers, then each get 25K = 50K per claim
·        Only applicable if there are two Πs
§         25K is the total property damage per claim
–         Personal injury protection (PIP)
o       Policy bought by first party pays
o       First party insurance company pays their medical bills
o       Can purchase PIP and 3rd Party coverage and receive both
§         Collateral source rule
§         TF’s amount isn’t lowered
–         Bad faith insurance
o       Insurance provider has a duty to protect the ∆ if they can
§         Reasonableness
§         If it seems likely Πs will prevail over the ∆, and Πs provider contacts ∆s provider making a settlement offer for less than the amount the ∆ will likely have to pay after a jury trial, say they are will to settle for the amount of coverage the ∆ has then the ∆s provider needs to settle and not make the ∆ pay more out of pocket. 
–         Loss payees
o       Persons/entities who receive the amount when there is a loss
o       Can be lien holder, mortgagors
–         Declaration page
o       Paper with all the pertinent information about the policy
o       Usually followed by the policy provisions.
o       Usually then followed by the endorsements
§         Like policy provision,
§         But they often change the policy provision
–         Policy is a contract and the principles of K apply
–         Power of attorney –
o       Has the right to cancel policy
o       Usually comes into play when insurers finance their premiums
–         Release form
o        I acknowledge…∆ is off the hook
o       Covenant not to sue
o       Tortfeasors?
–         Under insured motorist coverage – Example: ∆ has 25K/50K/25K, no assets, and completely @ fault
o       Π injured party (BI) and bills exceed 25K, say damages were 1 million
o       The Π gets the 25K
o       Stacking –
§         Π receives 25K + more if he purchased UIMC from his own provider
§         What the Π receives is contingent on the amount ∆’s policy paid (1million – 25K)
–         Covenant not to execute
o       “In exchange for 25 we will never go after personal assets, but we reserve the right to go after ∆ sue him to prove our UIM

licy – here are the provision for medical coverage (see Barlow pg. 32)
o       In S.C. doesn’t consider the policy – uphill battle
–         Assignment 2:
o       Auto financing co finances purchase of her new Camery
o       She had a Volvo (1990 model – no lien holder)
o       XYZ insurance co drops the Volvo and subs the camry
o       Auto financing requires her to have insurance coverage to car incase something happens
§         Fiscal damage coverage – paid to damage of your car- not needed for the volvo
§         Auto financing co is on policy as a loss payee, or sometime “lienholder”
·        K is w/ Ms. W
·        AF is on the K b/c they have special status (not a party to the K)
·        If there is a loss they are one of the payees “protection”
o       Ms. W couldn’t afford higher premium (due to fiscal damage coverage)
§         Finances premium (say it was $1000) w/ PFC
§         K says we are loaning you this money, and you will pay us back @ interest rate
Collateral for auto financing is the car, collateral for the financing company is the policy – the premium being paid towards the policy