If an insured does not think that his insurer handled his claim properly, he may have some recourse. Every contract contains an implied covenant of good faith and fair dealing that neither party will hinder the right of the other to receive the benefits of the contract. The duty imposed by this covenant applies to insurers and insureds. Some courts go so far as to hold the insurer to be a fiduciary to the insured.
A beneficiary may procure insurance upon the life of an insured only if he has an insurable interest in that insured's life. The determination of whether the beneficiary has an insurable interest depends upon the nature of the relationship between the beneficiary and the insured. If the beneficiary has a valid, insurable interest, he may recover the insurance proceeds upon the insured's death. If he does not, however, the insurer may plead a lack of insurable interest and avoid liability on the policy.
Civil Rights
(Business Property Insurance Policy Exclusions)
Various statutes prohibit the submission of false or fraudulent claims or evidence in connection with insurance claims. A person who commits such fraud may be subject either to civil liability to an insurer or to prosecution for a crime.
