The Release of All Claims
A first party property insurer may not require a general release from an insured when paying a claim because the payment is one of contractual indemnity where the amount is certain. At most, the insurer is entitled to a proof of loss or a receipt acknowledging receipt of payment. The only reason for a general release between a first party property insurer and its insured, is when the amount of loss is in dispute and a compromise is entered into between the insured and the insurer. When there is such a dispute additional consideration is paid the insured for the signed release that protects the insurer from litigation and allows it to buy its peace. The insurer, should explain to the insured the effect of signing a release.
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