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Insurance is an agreement between an Insurance company and an individual or business Policy Holder. Insurance Law regulates disputes between the company and the policy holder and regulates the companies as commerce. Insurance Law differs from state to state. The contracts used by insurance companies are legal documents, thus the agreements are regulated by law.
Policy holders pay a premium to an insurance company. The purpose of insurance is to spread the cost of loss or damage amongst a pool of policy-holders. When a policy holder suffers a loss and wishes to collect there may be some dispute. Insurance Lawyers may represent either the company or the individual in such a dispute.
Insurance is technically considered "commerce" and is therefore regulated by federal Law. Tort laws are state laws which refer to "torts" or "civil wrongs" that are grounds for lawsuits. Disputes between policy holders and insurance companies are often resolved in a Tort suit. So it is that Insurance Laws are both Federal and State laws.
Tort Laws are written by State Judges and Legislatures. These Laws are used to determine the outcome of an insurance suite. Tort Laws are often based on a document called the "Restatement of Tort", created by the American Law Institute. Tort Law is a major part of Insurance Law, falling under the Jurisdiction of the individual State.
Insurance lawyers are experts at deciphering contracts. Contracts are used by insurance companies to bind each party to the insurance agreement. When there is an issue of clarity over whether or not a party is eligible for payment, insurance lawyers refer to both isurance and contractual law.
Insurance fraud is misuse of insurance or a falsifying of an insurance claim. Fraud against an insurance company is covered by insurance law. Whether or not a policy holder has specifically broken their insurance contract he may be persecuted for insurance fraud.
Both insurance companies and policy holders have a responsibility which is regulated by insurance law. Insurance companies are responsible for paying out from the pool of premiums when a policy holder suffers a loss. A loss is defined in the contract between the two parties. Insurance may be specific or general in its definition of loss and this definition may require deciphering by the courts if disputed.
As insurance is an abstract commodity, insurance law must be very explicit. Insurance companies must be extremely familiar with insurance law and all policy holders' benefit from some knowledge of insurance law as well. Insurance Lawyers are a valuable asset for reference when dealing with matters of insurance.
Both Insurance companies and policy holders are legally responsible for upholding their end of the contract. Because Insurance is such an important aspect of commerce, insurance law has been very carefully written and regulated. Insurance law is an explicit, dynamic and invaluable part of the American Legal and economic system.
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