In: Finance
Is the insurance policy voidable under this situation? Explain your answer.
Lightning struck a tree in the Gibson’s yard, causing it to fall over and smash the bay window in their living room. The Gibsons were so frightened that they decided to visit their neighbours to calm themselves. When they returned home, they discovered that someone had walked through their broken bay window and stolen many of their valuable possessions. They have a homeowners policy.
Yes it is a voidable insurance policy or contract.
Reason
Home owners policy covers following this;
1) DWELLING PROTECTION - It covers structure of the home (e.g. foundation, walls and roof)
2) PERSONAL PROPERTY PROTECTION - Electronics are stolen from home or furniture was damaged by a fire. Personal property protection will help pay to repair or replace belongings if they are damaged or destroyed by a covered risk.
3) LIABILITY PROTECTION - Homeowners insurance policy provides liability coverage when someone is injured,but they are not staying with you by your property.
Voidable contract
A voidable contract is to be legal and enforceable. but it can be rejected by one party,if the contract is having any defects. If a party with the power to reject the contract chooses not to reject the contract despite the defect, the contract remains valid and enforceable.