Tag: Duties
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The “Special Relationship” and Insurer’s Duty to Act Fairly and Honestly
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Insurance policies are unique among widely used financial contracts. Insurance is rooted in risk pooling. Insurers collect premiums from policyholders and use these funds to pay claims to those who suffer losses. This allows the financial burden to be spread efficiently across many participants. The fortunate ones who avoid losses…
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Case Study: Insurer’s Unfettered Discretion in Homeowner’s Claims
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The relationship between an insurance company and a policyholder is one of dependence and inequality. Insurance policies generally represent contracts of adhesion, a term which refers to a standardized contract drafted by the dominant party (the insurer)—to meet its own needs—for acceptance by the subordinate party (the insured), and which,…