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Insurance

What Is Insurance Law?

Insurance laws are used to regulate the insurance industry and protect consumers and policy holders. Insurance laws cover different aspects of insurance coverage such as life, health, home, and car insurance. Insurance laws protect against excessively high premiums and set standards for contracts and bad faith claims. Many areas of law intersect with insurance law including: contracts, wills and trusts, tax law, health care law, and consumer law.

The Supreme Court has held that Congress may regulate interstate insurance transactions and Congress has determined that state laws may control the insurance business. Acts such as the McCarran-Ferguson Act give states this regulating power.

What Is Insurance?

Insurance is a form of risk management where risk is transferred from one entity to another in exchange for a paid premium, which is the fee paid to the insurer for assuming risk. Entities (like people or corporations) insure things like property or health against loss or harm arising out of specific incidents, such as death, accidents, fire, or floods, in return for a payment proportionate to the risk involved. The insurer is usually a company selling insurance and bases its rates on levels of risk and factors contributing to the risk. A party becomes insured based on a contract between the insurer and insured called an insurance policy, and the insured is indemnified against any claims covered by the policy.

Insurance policies generally include the parties (the insurer and insured), the period of coverage, what is and is not covered, the premium, particular events or losses covered, and the amount to be paid to the insured in the event of such events. For example, a life insurance policy would state the amount of payment guaranteed to a decedent's family or other designated beneficiary upon the death of the insured, and would specify the requirements for payment and any circumstances upon which the company would not be obliged to pay.

Automobile insurance is one of the most common forms of insurance and is necessary in most of the United States in order to legally operate a vehicle. Other examples of insurance include disability insurance, builder's risk insurance, credit insurance, crop insurance, travel insurance, business insurance, and flood insurance.

When Should I Contact an Insurance Lawyer?

Sometimes insurance companies may make bad faith actions by denying a valid claim under the insurance contract, refusing to pay for an unreasonable amount of time, sets excessive premiums, or commits some other act of fraud or deception. Dealing with insurance companies and insurance laws can be frustrating and very complex. An insurance lawyer may be able to help you sort out difficult matters and settle your claims.