In the case study, Jones has the Homeowners policy. The policy is to provide financial protection against the insured risks that could be disaster, accident, theft, or fire. Form the illustration; it seems the policy contract is between Jones and the insurance company. Jones also has the contract with Easy Money Mortgage Company. From the illustration, the company provides home ownership services by allowing individuals to own homes at premiums. Jones’ contract with Easy Money Mortgage Company is to pay the premiums for the specified period of time. It happens that Jones decides to cancel his contract with the insurance company without informing Easy Money Mortgage Company. It is unfortunate that in the event of the accident, Easy Money Mortgage Company realizes that the Jones had cancelled his contract with the insurance company. Controversial questions emerge on whether Jones had the authority to terminate the contract without informing the mortgage company.
The insurance company should sue Jones for providing false information about the sale of the property in question. Jones acted in his own capacity to cancel a contract yet he had no full ownership of the property. The law does not hold the neither the insurance company nor the agent liable for the accident. The insurance company seized to be a party to the property immediately when Jones informed it of the sale of the property. It is also important to note that the Homeowners Policy was between Jones and the insurance company and not between the mortgage company and the insurance company. Easy Money Mortgage Company do not have the right to raise claims to a policy contract to which it is not party. It is evident that the insurance company could only take action on information from their client. Therefore, the insurance company is not liable to compensate Easy Money Mortgage Company.
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