Insurance 101 – Chapter 3 – Volume 18 – More on Post Loss Underwriting

More on Post Loss Underwriting

If the case, Hailey v. California Physicians’ Service, 158 Cal. App.4th 452, 69 Cal.Rptr.3d 789 (Cal. App. Dist.4 12/24/2007), is appealed and affirmed by the California Supreme Court, it will help the Hailey family individually. However, the law of unintended consequences and Hailey will make health insurance too expensive for the rest of the citizens of California because the investigation required to protect against fraud, misrepresentation or concealment exceeds the premium.11 Of course, as Judge Heesman points out, Hailey has nothing to do with insurance but, rather, with a health services plan.

LA Sound USA, Inc. v. St. Paul Fire & Marine Insurance Co., decided one month before Hailey, affirmed rescission of a policy for an innocent misrepresentation on an application. More recently, the Ninth Circuit, in Certain Underwriters at Lloyds, London v. Inlet Fisheries Inc. found the doctrine of uberrimae fidei (utmost good faith) required a marine insurance applicant to disclose all facts material to the calculation of risk. Even if not asked, the insured had a good faith duty to reveal material facts about its vessels in applying for insurance. Rescission by the insurer was proper because they were deceived.

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library

Legal Disclaimer

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.


Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.