Insurance Law in a Nutshell (Nutshells) by French Christopher & Dobbyn John
Author:French, Christopher & Dobbyn, John [French, Christopher]
Language: eng
Format: epub
Publisher: West Academic
Published: 2015-12-15T05:00:00+00:00
C. ASSIGNMENTS
1. CHOSE IN ACTION
In addition to naming additional insureds under the “does insure” clause of the policy, a third person, with or without an insurable or other interest in the subject matter of the insurance, can be named as payee of the proceeds by designation in the clause usually worded “loss, if any, payable to _______.” This arrangement is used, for example, when a debtor wishes to assign any payments made by an insurer in the event of destruction of his property to a creditor who is otherwise unsecured. Since without a lien or mortgage the creditor could have no insurable interest in the property of a solvent debtor, this form of assignment of proceeds is the closest alternative to being named an additional insured. The phrase, “as his interest may appear,” is occasionally appended to the “loss payable” clause to signify, in the example above, that the loss payee is to receive proceeds only to the extent of his debt outstanding at the time of payment, the remainder of the proceeds to be paid to the named insured .
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Such an assignment of a chose in action (right to proceeds) against the insurer can occur in the policy with the consent of the insurer or in a separate agreement between the policyholder-assignor and the assignee without the consent of the insurer. It can occur before or after the loss, as long as it occurs before the payment of proceeds by the insurer.
For purposes of a subrogated cause of action against the assignee, assignment of the mere chose in action does not render the assignee an “insured” under the policy.
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