Obviously insurance law deals with all types of insurance and the legal controversies and quagmires that surround it, but that doesn’t mean much all by itself. What type of legal controversies and quagmires can arise? Will you ever find yourself in one? Sometimes insurance doesn’t work as it should, and you might need to protect yourself and your loved ones. These are the various aspects of insurance law you should know.
There are three basic categories into which insurance law falls: the regulation of insurance as a business, the regulation of insurance policies and the content therein, and the regulation of how claims are handled by insurance companies.
A provision of the 2005 Gambling Act seemingly removed the insurable interest mandate in almost all common law jurisdictions. Insurable interest isn’t what it sounds like. It’s the relationship between the person who is insured and the subject of that insurance. Insurable interest was considered a requirement in order to legally enforce most insurance contracts. A failed contract is one such reason an insurance provider might find itself at court.
Have you heard of the concept of utmost good faith? It’s what any insurance contact represents.
Insurance companies are bound by the same laws as other businesses. They must follow zoning or land use regulations. They must pay their taxes. Their workers are subject to wage and hour laws. But insurance companies are also regulated by additional laws, many of which were implemented after the U.S. Supreme Court began to rule on associated laws in the 1940s.
Most states have their own administrative agencies put into place for regulating insurance, and that can make liability under the law more complicated because many insurers operate across state boundaries.
Another reason that an insurer might find itself in hot water is bankruptcy. When an insurance company files for bankruptcy, the National Association of Insurance Commissioners acts to reduce the financial hardship on both sides of those under legal contract.
The U.S. regulates insurance companies more than you might think, and policyholders are protected against claims that act on bad faith by law. All contracts have certain standards by which they must abide, and premiums are regulated so that prices stay as low as possible. If you think your insurance company is taking advantage of your situation by breaking or bending any clause of the insurance contract, then it’s time to seek the aid of legal counsel.