Asked by Asmadi Zkeri on Jun 23, 2024
Verified
Andre insured his automobile against theft under a policy of insurance. Shortly after he had insured the vehicle, he found himself short of cash, and offered to sell the vehicle to his friend for $500 if his friend would dismantle it for parts. Andre did not tell his friend that he intended to claim that the car had been stolen. His friend bought the car for $500 and dismantled it. If the loss is paid by the insurer, and the insurer later becomes aware of the fraud, the insurer may recover the money paid to Andre.
Insurer
An entity that provides insurance policies to individuals or organizations, offering financial protection against losses from specified risks.
Fraud
Intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to oneself or some other person.
Recover Money
The process of obtaining funds that were lost or owed through legal or other means.
- Understand the legal consequences associated with fraudulent activities in insurance claims.
- Understand the rights of the insurance company in the context of paying a claim and exercising salvage and subrogation rights.
Verified Answer
OE
Olivia EvansJun 27, 2024
Final Answer :
True
Explanation :
The insurer may recover the money paid to Andre because the payment was made under a fraudulent claim. Insurance contracts are based on the principle of utmost good faith, and any deception or fraud allows the insurer to seek restitution.
Learning Objectives
- Understand the legal consequences associated with fraudulent activities in insurance claims.
- Understand the rights of the insurance company in the context of paying a claim and exercising salvage and subrogation rights.