CONDITIONS (Excerpt)

The Conditions section explains how each party must respond in specific circumstances. If the insured fails to react appropriately, his or her claim can be denied. If the insurer fails to react appropriately, it can be subject to a bad faith lawsuit. Some of the conditions are:

Transfer of Rights of Recovery Against Others (Subrogation)

If the insured has any rights against others for recovery of payments that have been made to him or her by the insurance company, such rights are transferred to the insurance company after it pays any loss. The insured must help the company enforce these rights against third parties and must do nothing that might impair these rights.

Separation of Insureds

The policy applies to each insured as if he, she or it were the only insured; it applies separately to each insured against which claim is made. This clause does not increase the total limits of liability under the policy.

Insured’s Duties in Event of Loss

The insured is required to give notice as soon as practicable of any occurrence that may give rise to a claim. In addition to giving the details of the occurrence and the names of any persons injured, names of any witnesses, if any, are to be furnished. If claim is made against the insured or a suit is instituted, prompt notice must be given to the insurance company to whom copies of any demands, notices, summonses, or legal papers are to be forwarded. The insured is also required to cooperate in the investigation, settlement or defense of the claim or suit and to authorize the insurance company to obtain records or other information. No insured, except at his or her own expense, is to make any payments, assume any obligation or incur any expense without the consent of the insurance company. An exception is made for first aid extended to injured persons.

Immediate Notice of Claim

The insured is required to notify the company promptly of any occurrence that may result in a claim or suit brought against him or her. Further, he or she is required to immediately send to the company any demands, notices, summonses, or legal papers received in connection with the claim.

Cooperation with Company

The insured is required to cooperate with the insurance company in the investigation, settlement or defense of any claim or suit. He or she must also authorize the company to obtain records and other information.

Enforcing Rights against Third Parties

The insured must assist the company in the enforcing of any right against any third party who may be liable to the insured because of injury or damage to which the insurance may apply.