Tim had been unemployed for three years and had used up all his savings. Desperate to make some income, he watched a commercial about insurance coverage and a brainstorm hit him. He would contact old friends on Facebook, figure out which ones were severely ill, and then take out life insurance policies on them. This way, when they passed away, he would finally make some money.
(a) Ignoring the moral aspects, will this new scheme work for Tim? Why or why not? Refer to the applicable law.
(b) With his mind still on insurance, Tim has a second brainstorm. When he was married to Jessica, they had taken out a policy with Nationwide Insurance and insured their home. The policy he bought had named him as the insured. The policy also provided that the spouse of the named insured would be covered. Unfortunately, he and Jessica had subsequently divorced but he remembered seeing on Facebook that the home he had shared with Jessica was completely destroyed by fire. Tim decides to sue Jessica and Nationwide asserting claims for breach of contract and bad faith, and seeking to recover the proceeds under the insurance policy. Will Tim succeed in his lawsuit? Explain referring to the applicable case in the text.
c) With his mind still on insurance, Tim recalls that he has a health insurance policy and that he might be able to collect some money under it now that his kidneys are acting up again. He’s a little concerned because he lied on the insurance policy application and didn’t reveal that he had chronic kidney disease. However, that was one year ago, so he guesses it doesn’t matter. Is Tim correct? Explain the applicable law.
d) Tim finally gets himself back on track and returns to his job as an orthodontist. While installing a palate expander on one of his employees, Sara, Tim decides to prank her. Because Sara loves bulldogs, he inserts some temporary expanders into her cheeks, which makes her look like a bulldog. Shortly thereafter, at the office holiday party, Tim shows the pictures to the rest of the staff. Sara refuses to return to work and sues Tim for battery. Tim has an insurance policy with a professional liability provision. Does the insurance company have to defend him in this lawsuit? Explain why or why not and cite the relevant case in the text.