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Insurance law is a body of law which pertains to the insurance industry. The goal of insurance law is to create regulations and standards which govern the practice of insurance sales, policy writing, and handling of claims. Such law protects both consumers and insurance companies by setting clear boundaries and creating methods for enforcement of violations of the law. The content of insurance law varies widely from nation to law, and there are lawyers who specialize in it, illustrating how complex it can be.
The idea behind insurance is that it allows people to prepare for the unexpected. When people purchase insurance, they are taking steps to provide financial coverage in the event that they experience problems like car accidents, death, health issues, damage to a business, or destruction of a home. Insurance has been issued by a variety of companies for centuries, and at various points in history, the practice has been unregulated and sometimes highly disadvantageous for consumers. The point of insurance law is to address common issues which arise.
Contents of legal codes pertaining to insurance can include a wide variety of topics. The law may spell out specific mandates, like how insurance policies can be written, the types of limitations insurance companies can use, licensure for insurance agents, how claims should be processed, and how insurance companies may advertise. The law also provides provisions for appeals from consumers who have been denied coverage or claims. Many nations have anti-discrimination laws in place to protect consumers, and they may have laws which standardize the types of coverage available.
Insurance laws also spell out the definition of insurance fraud and the potential penalties for fraud. The law may include a list of activities which are specifically illegal for insurance companies, ranging from colluding with consumers to commit fraud to denying coverage to people who are considered insurance risks. Many nations also have laws mandating situations in which people must purchase insurance; for example, drivers may be required to hold insurance to register a car, and homeowners may be obligated to own an insurance policy as long as they hold a mortgage.
For the average consumer, knowledge of insurance law is not usually necessary. By working with reputable agents and brokers, consumers can get the coverage they need from companies which adhere to the law, and as long as they use their insurance reasonably and in good faith, they should not run afoul of insurance law. However, there may be occasions when an insurance lawyer is useful, as for example when someone is denied a claim or coverage and wishes to see which legal options are available.