Insurance as a Necessity
HOW THE LAW OF UNINTENDED CONSEQUENCES COSTS THE INSURANCE INDUSTRY
Read the full article at https://lnkd.in/gUytarJD and at https://zalma.com/blog plus more then 4200 posts and see the full video at https://lnkd.in/gMqmUSBS and at https://lnkd.in/ggQFFB-v.
Neither the courts nor the governmental agencies seem to be aware that in a modern, capitalistic society, insurance is a necessity. No prudent person would take the risk of starting a business, buying a home, or driving a car without insurance. The risk of losing everything would be too great.
A simple insurance contract between two parties might say: “I insure you against the risk of loss of your engagement ring valued at $15,000 by all risks of direct physical loss except wear and tear for a premium paid by you of $15.00.” Anyone who could read would understand that contract. If something happens to damage, destroy or lose the ring the insurer will pay you $15,000.00.
Bad Faith Causes Bad Behavior
In the 1950s, the California Supreme Court created a tort new to the pantheon of U.S. jurisprudence: the tort of bad faith.
A tort is a civil wrong from which one person can receive damages from another for multiple injuries to person or property. The tort of bad faith was created because an insurer failed to treat an insured fairly, and the court felt that the traditional contract damages were insufficient to properly compensate the insured.
The insurers who treated their insureds badly, in fact, profited since they continued their wrongful acts and only were required to pay the few insureds that sued. Those that did not sue added to the wrongdoing insurers profit margins.
The law of unintended consequences struck the insurance industry and the insurance buying public. Rather than deter wrongful actions by application of the tort of bad faith, the law of unintended consequences resulted in punishing the honest and correct insurers, honoring the insurers who acted in bad faith with profit, and allowed many frauds to succeed.
Get my Book It’s Time to Abolish The Tort of Bad Faith
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected].
Subscribe to Zalma on Insurance at locals.com https://lnkd.in/gn5WAi6C.
Subscribe to Excellence in Claims Handling at https://lnkd.in/gNm9EWKJ.
Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://lnkd.in/gxA7YGe; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://lnkd.in/gV9QJYH; Go to Barry Zalma on YouTube- https://lnkd.in/g2hGv88; Go to the Insurance Claims Library – https://lnkd.in/gKCTg53
We are 100% funded for October.
Thanks to everyone who helped out. 🥰
Xephula monthly operating expenses for 2024 - Server: $143/month - Backup Software: $6/month - Object Storage: $6/month - SMTP Service: $10/month - Stripe Processing Fees: ~$10/month - Total: $175/month
- Art
- Causes
- Crafts
- Crime
- Dance
- Drinks
- Film
- Finance
- Fitness
- Food
- Spellen
- Gardening
- Health
- Home
- Literature
- Music
- Networking
- Paranormal
- Other
- Politics
- Bedrijvengids
- News
- Party
- Science
- Religion
- Shopping
- Sports
- SyFy
- Politically Incorrect
- Philosophy
- Theater
- Technology
- Wellness