An insurance policy issued to a homeowner violates certain statutorily required coverage terms. Will the homeowner likely succeed in recovering losses caused by a theft within policy terms?

• A. Yes, because the homeowner belongs to the class of persons intended to be protected by the statute.
• B. No, because a statute violation renders the contract unenforceable regardless of who files.
• C. Yes, because insurance contracts are always enforceable even if statutes are violated.
• D. No, because public policy always favors the insurer.

Answer: (A)

The main concept is that remedial insurance statutes protect the insured and create a remedy when a policy omits or violates mandated coverage. If the policy issued to a homeowner violates statutorily required terms, the insured is within the class the statute intends to protect, so the homeowner can recover for losses that fall under the statute’s protection. The statute’s purpose is to ensure minimum coverage for those in need of protection, not to void every contract entirely. Thus, even though the policy is noncompliant in some respect, the homeowner can recover losses caused by a theft within the scope of the required coverage. The other options misstate how such statutes operate: violations don’t automatically render the entire contract unenforceable; insurance contracts aren’t always enforceable in disregard of protective statutes; and public policy doesn’t always favor the insurer when the statute is designed to aid consumers.