Ellen, who has a safe driving record, purchases automobile insurance from an ins

Question

Ellen, who has a safe driving record, purchases automobile insurance from an insurance company. Ellen cannot assign her rights to be insured to another driver for which of the following reasons?

A. The assignment would materially alter the risk and duties of the insurance company. B. Claiming insurance is a future right and hence cannot be assigned. C. Insurance is a personal service contract and hence cannot be assigned. D. Personal contracts like insurance are assignable only with the agreement of all parties involved in the contract.

Explanation / Answer

The answer is option A. Insurance is assigned according to the customer’s characteristics, such as their age, their car model/current characteristics, their safe driving evaluation, diseases that the customer has or could present in the future because of inheritance that could represent a driving risk, etc., which let the insurance company calculate the risk that having a particular person as a customer represents for them, and that is represented in the cost of the insurance matriculation and the benefits It has. So assigning Ellen’s rights to a third party would represent a risk for the company; a new insurance should be acquired by the new driver.

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