Dallas Fort Worth Insurance Lawyer Blog
Credit life insurance polices are common in situations where a person is purchasing something on credit. Examples include cars, motor homes, houses, etc. These policies are usually purchased at the time of purchase is offered when the paperwork for the sell is being processed.
This type of policy is often times ripe for misrepresentations made by the seller of the policy. Mistakes are also made by the purchaser of the policy. In both cases, the buyer is not really paying attention to the terms of the policy or the questions being asked. The purchase of the policy is secondary to must purchasers who are primary interested in the thing they are purchasing such as that car, motor home, or house.
There are many parts of the Texas Insurance Code that deal in a general way with the purchase and sell of these policies. However, Texas Insurance Code, Section 1153.052 deals specifically with these Credit policies.
Here are some of the specific provisions that each individual policy or group certificate of credit life insurance and credit accident and health insurance must set forth:
- the insurer’s name and home office address
- the debtor’s name or names
- in the case of a certificate under a group policy, the identity, by name or otherwise, of the person or persons insured
- the full amount of premium or the total identifiable insurance charge, if any, to the debtor, separately for credit life insurance and credit accident and health insurance
- a description of the coverage including the amount and term
- any provisions, limitations, and restrictions
The policy must also state that the benefits must be paid to the creditor to reduce or extinguish the unpaid indebtedness and, wherever the amount of insurance may exceed the unpaid indebtedness, that any such excess must be payable to a beneficiary, other than the creditor, named by the debtor or to his or her estate.