Insurance Law…Risky Business

I’m really enjoying my Insurance Law class a lot. I decided to take it because I heard a lot of people say it would be useful (that’s probably the reason that I choose half the classes I take). It is indeed useful because as I’ve learned, everybody has insurance for something and when something goes wrong (lawsuit = something went wrong somewhere), insurance companies are almost always involved.

Insurance really is essentially a bet between you and the insurance company: you’re betting that something will go wrong and the insurance company is betting that nothing goes wrong. If something goes wrong, you win and the insurance company loses because they now have to give you money (but you also lose because something went wrong, e.g. your house burned down, your leg got amputated, etc.). If nothing goes wrong,  the insurance company wins because they get to keep all the money you’ve been giving them (the premiums) and you lose because you gave them money and got nothing in return (but I guess you win because nothing bad happened).

In insurance cases, people naturally tend to want to side with insured because there’s a perception (rightly or wrongly) that insurance companies are large and wealthy and will do anything to try to wiggle out of paying when they’re supposed to pay. Professor Hylton (Maria O’Brien Hylton…not Keith Hylton, her husband) has been trying to get us to see the view of the insurance company and it may be working.

In one case, a man (Mr. Roseth) was taking several calves to be sold when his truck got in an accident and many of the calves were injured. He called the insurance company to find out whether the insurance company would pay the difference if he would sell the injured calves for cheaper than he had planned. The insurance claims adjuster said he didn’t have Mr. Roseth’s insurance policy in front of him but that the insurance company would comply with whatever the man’s policy said. Mr. Roseth decided he would go ahead and sell the calves…but when he asked the insurance company to reimburse him , they refused because such loss was not covered under his policy.

Although we might be sympathetic to Mr. Roseth, it’s probably fair to say that it was pretty unreasonable for him to expect the insurance company to reimburse him when the person he spoke to said that he didn’t know what Mr. Roseth’s policy said. A reasonable person would probably have called up again to find out more information or sent a copy of their policy to the insurance company or done something else. The insurance company should clearly prevail. Maybe I’ll come to this conclusion more often as class progresses?