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IMPORTANT
ASPECTS OF
EQUINE MORTALITY INSURANCE
Part
Two of a Two Part Series
PART
TWO: COMPLYING WITH DUTIES UNDER
MORTALITY INSURANCE POLICIES
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Occasionally, the one who buys a policy of mortality insurance
(called the policyholder) and the insurance company disagree on
the issue of whether the company is required to pay a request for
benefits (called a "claim"). People usually learn after
it is too late that many of these problems and disputes could have
been avoided. This article, which concludes a two-part series on
mortality insurance, discusses duties often found in mortality policies
that, if not followed by policyholders, could result in the denial
of a claim. Here are some of them.
The Important Duty of Timely Notice When Your
Horse is Injured or Ill
One of the most common reasons for which mortality
insurance companies deny coverage is untimely notice. That is, the
policy holder (or, if allowed, someone on his or her behalf) has
failed to comply with the policy's requirement of notifying the
insurance company when the insured horse has become injured, lame,
sick, or in an accident. By contacting the company when the horse
is already on the verge of demise -- or, worse yet, after the horse
has been destroyed -- the policyholder is almost certainly asking
for trouble.When does the policy require notification?
Read your policy very carefully. Notice requirements can vary from
company to company. Most mortality insurers require policyholders
to give immediate or prompt notice of an insured horse s injury,
lameness, or illness.What's so important about notice,
anyway? Mortality insurers usually insist on timely notice. The
rationale is that the insurance company, when issuing a policy on
your horse, has a financial interest in the horse's well-being.
The company wants to know if its investment is jeopardized. Complying
with the duty of prompt notice will make sure that the company has
this information.Can the matter wait until another
day? What if it is a Sunday evening, and your horse is wobbling
or showing signs of colic? Chances are good that you will have summoned
your veterinarian. However, you might assume that the day of the
week or lateness of the hour prevents you from notifying your mortality
insurance company. Is that a valid assumption? No. Most mortality
insurance companies expect to receive notification calls at any
time. For this reason, companies generally designate people to receive
calls 24 hours a day and 7 days a week.Do insurance
companies really take action after receiving notice? Yes. For example,
when a horse colics, the insurance company can do any number of
things, including: investigate what caused the problem; review with
the attending veterinarian the type of medical attention the horse
is receiving; order a new course of treatment; send the horse to
another veterinarian; determine whether the horse's condition is
covered under the policy; give consent to euthanize the horse; and/or
plan for an immediate post-mortem examination. A company that has
been deprived of the opportunity to take some or all of these actions,
because you have failed to give it proper and timely notice, will
be more likely to deny your claim. The company might be legally
justified for doing so.
The Importance of Notifying the Right Person or
Entity
From the insurance company's standpoint, notice
that has been improperly directed may be the same as no notice at
all. Sometimes, people who fail to read their mortality insurance
policies wrongly assume that they can satisfy the policy's notice
requirement by notifying their insurance agent or leaving a message
on the agent's answering machine. The problem is, most policies
do not specify the agent as the one to receive notice. Direct your
notice to the exact person or company specified in the policy. It
can't hurt to keep the appropriate contact person's phone number
and your policy number in the barn office or near the barn phone
as well as in your tack trunk, wallet, truck, trailer, and car.
The Important Duty of Truthful Representations in the Application
It goes without saying that anyone who applies
for mortality insurance must provide truthful information. Under
the laws in most states, if a company later learns of a material
misrepresentation or omission in the insurance application, that
company may be legally justified in voiding the policy and denying
a claim. The rationale for this rule is that the company and its
underwriters are relying on truthful information before agreeing
to issue a policy at a given rate. Court rulings in some states
provide that even if an applicant had no intention of deceiving
an insurance company, but the application contained untrue or misleading
statements, the company might still be justified in voiding the
policy and denying benefits. A few states, such as California, Louisiana,
New York, and Texas, have statutes on the books addressing the issue
of what kinds of misrepresentations can justify a company in voiding
a policy.
Conclusion
In conclusion, please keep the following ideas
in mind:
- A mortality insurance policy is a contract between
the policy holder and the insurance company. By reading your
mortality insurance policy very carefully, you will learn about
your duties under the policy. Insurance policies, in recent
years, have more easy to read and understand.
- Before purchasing mortality insurance, consider asking
your insurance agent about duties expected of you under the
policy. A knowledgeable agent will be able to explain them to
you or will forward your questions to an appropriate person
at the insurance company.
- All states have statutes regarding insurance and cases
on the books that affect the duties of policyholders. These
authorities may govern notice requirements (even when late notice
might be excused in some states), misrepresentations, and rights
that policyholders may have in regard to their insurance. Because
these laws and cases differ from state to state, direct your
specific questions to a knowledgeable attorney.
This article does not constitute legal advice.
About the Author
Julie I. Fershtman, Esq.
Fink, Zausmer & Kaufman, P.C.
31700 Middlebelt, Suite 150
Farmington Hills, MI 48334-2374
(248) 851-4111
E-MAIL: Fershtman@aol.com
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