A Policy of Ethics… in the Policy

March is Ethics Awareness Month in the insurance industry. Through an arrangement with the N/A, PropertyAndCasualty.com is bringing a variety of ethics questions and scenarios to insurance and risk professionals.

This scenario deals with the relationship between an insurance policy and public policy. The link below will let you sound off on what you think about the issue.

Tessie asked her boyfriend Ted to drive her parents' car back to her house because she wasn't feeling well. Ted did so, and hit another car. Tessie's parents had never given Ted permission to drive their car—nor had they ever denied permission. Had Ted requested permission, however, they would not have allowed it. Tessie's parents' carrier denied coverage to Ted, stating that he had not received the consent of the named insured.

The carrier referred him to its policy language as approved by the Insurance Department. The language was quite specific—no coverage.

Ted argued he had never seen the policy and assumed that permission to operate the car rightfully came to him as a result of his girlfriend's request for help. Was Ted misled? When is "claims policy" in violation of "public policy"?

Feel free to share your ideas in our Discussion Forum area or email your thoughts to PropertyAndCasualty.com Associate Editor John Griffiths at JGriffiths@Vertical.Net.