Version 1: Rebecca James calls her insurer at 3:00 am and asks the insurer to increase the coverage on her house from $1,600,000 to $1,800,000. The insurer agrees to do so. During the night the house burns to the ground, and the company denies liability for the additional $200,000 in coverage.
Your tasks:
1. On what grounds do you think the denial is based? Should the insurance company be obligated to pay the original $1,600,000?
2. A report from the Financial Rights Legal Centre suggests that insurance claims denials and disputes are common. How do you account for the feeling held by many people that something is almost “immoral” about an insurance company rejecting a claim or canceling a policy in the middle of the policy term? Do you agree or disagree with this position?
Total number of words (answers only): 200 (0.6 page)