Jacob sold his house to Shelia for $140,000 in cash. Jacob "threw in" insurance on the house as part of the deal and did not bother telling the insurer that there was a new owner. Four months after Shelia purchased the home, a windstorm damaged the roof. Which of the following legal characteristics of insurance contracts could the insurer use to legally deny payment for the damage to the roof?

Question

Quizplus · Accepted Answer

Insurance contracts are personal contracts, meaning they are agreements between the insurer and the insured individual. Since Jacob did not inform the insurer about the change in ownership, the insurer can deny the claim because the contract was with Jacob, not Shelia.

Jacob Sold His House to Shelia for $140,000 in Cash