The cancellation condition in the standard ISO HO 3 homeowners policy is often superseded by specific states' statutory limitations on cancellation. These are typically added to policies by way of state-specific amendatory endorsements because they vary so widely from state to state. However, certain general concepts exist.
To no surprise, failure to pay premiums due for a policy gives the insurer almost unfettered leeway to cancel a policy. Generally, the entire policy premium is payable in advance of the inception date of the policy. Many insurers offer some form of installment payment plan. If you do not pay, coverage lapses. While an insurer may reinstate coverage once it receives a late premium payment, it usually only does so prospectively, not retrospectively. If you have a loss during the period when coverage lapsed and was cancelled due to nonpayment, you are out of luck. This is not a gamble you want to take. Pay your premiums and pay them timely.
The ISO HO 3 homeowners policy's nonrenewal condition provides that the insurer may decide not to renew coverage on expiration of the policy. If it chooses to do so, it must give the insured at least thirty days written notice of its intent not to renew prior to the expiration date. As with the cancellation condition, many states place different limits on an insurer's right to not renew homeowners policies.
This condition provides that the insured may not assign the policy without the insurer's consent. It recognizes that an insurance policy is a personal contract between the insurer and the insured. The insurer has the right to decide who it will and will not insure. The assignment protects that right. This is a standard condition that applies in one form or another in essentially all insurance policies, not just homeowners policies.
When a property insurer pays for a loss to covered property, the insurer becomes subrogated to, or succeeds to, the rights of the insured against any third party who may have been responsible for causing the loss. This right of subrogation arises as a matter of law. It prevents an insured from a double recovery, that is, recovery both under the policy and recovery in damages from the person who caused the loss. When an insurer makes a recovery against the responsible party, that operates to help make the insurer whole for its payment of the loss.
The subrogation condition first acknowledges that the insured may waive all rights of recovery against a third party prior to the occurrence of a loss. The subrogation condition next provides that if the insured has not entered into such a waiver, the insurer may require that the insured assign its rights of recovery against a third party to the extent the insurer has paid the insured's loss.
Third, the subrogation condition requires that when the insurer demands such an assignment of rights against a third party by the insured, the insured must sign and deliver all related papers and must cooperate with the insurer. That means, for example, that if the insurer must sue the third party and call the insured as a witness, the insured must cooperate and appear.
Our website is not responsible for the information contained by this article. Webworldarticles.com is a free articles resource thus practically any visitor can submit an article. However if you notice any copyrighted material, please contact us and we will remove the article(s) in discussion right away.
This article was sent to us by:
Lilian Keymon at
10062010
1. Concepts of the personal car insurance policy are very complex
All articles in this directory are property of their respective authors. Additionally, read our Privacy Policy
© 2010 WebWorldarticles.com - All Rights Reserved. Partners: Gunblade Saga