Author Question: Insurable Interest. Claude and Mildred owned their home in Lexington and had a fire insurance policy ... (Read 124 times)

cnetterville · **on:** Jun 24, 2018

Insurable Interest. Claude and Mildred owned their home in Lexington and had a fire insurance policy on it. Claude and Mildred contracted with Benjamin to build a new home for them in exchange for cash and transfer of their present home. After conveying the home to Benjamin, Claude and Mildred continued living there and paid both rent and the insurance premium. The fire insurance policy was never assigned to Benjamin. While Claude and Mildred were still living in their old home, a fire damaged it. The insurance company would not pay, claiming that Claude and Mildred had no insurable interest in the property at the time of the loss. Discuss fully how a court will rule.

Question 2

A company that has more than 25,000 worth of business with the federal government and does not state what action will be taken against employees who violate the company's drug-free policy would be in violation of:
a. the Drug Prohibition Act
b. the Drug Control in the Workplace Act
c. the Drug Prevention in the Workplace Act d. the Zero Tolerance Act
e. none of the other choices are correct

chem1s3 · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

Insurable interest
Claude and Mildred have an insurable interest in their home, despite the fact that they had conveyed its ownership to Benjamin, because they had a contractual liability to trade in the house as part of consideration for construction of the new house. The court stated that in general a person has an insurable interest in the subject matter insured where he has such a relation or connection with, or concern in, such subject matter that he will derive pecuniary benefit or advantage from its preservation, or will suffer pecuniary loss or damage from its destruction, termination, or injury by the happening of the event insured against. The court found that there was a direct pecuniary interest in the preservation of the subject property.

Answer to Question 2

e