Last September I wrote in the blog about this case, Aruba Missing Girlfriend – beneath the story on Accidental Death Coverage!, and some of the insurance questions that were being raised at that time. You might recall the original news articles last fall when Gary Giordano was detained by Aruba police for questioning in her death. Now this case is back in the news because Gary Giordano, who was Robyn Gardner’s travel companion, has sued American Express for twice the policy benefits, $3,500,000, for Robyn’s presumed accidental death.
In my mind this raises one of the basic fundamentals of insurance, that of insurable interest. Did Giordano have an insurable interest in Robyn’s life? It is presumed that a person has an insurable interest in the life of another if that person’s death results in a financial loss. A financial loss could be loss of future income, final expenses, or loan repayment. Insurable interest is one of the arcane insurance principals that is rarely heard by the public but is discussed by insurance professionals. It’s origins are based on what is and what is not in the public interest . This can be better off understood by thinking about what is not in the public interest; it is not in the public interest to allow a person to insure the life of another and to be the beneficiary of that policy without the person having some personal financial loss if the insured dies which might be a motive for murder.
When policies are underwritten prior to issue then insurable interest is one of the items that an underwriter might review to ensure that a proper beneficiary exists or the policy owner is proper. However in this case the policy has already been issued so therefore it would be a question for Robyn’s estate to ask the court.
The policy has been issued and at some point Robyn might be presumed legally dead by accidental means – required by the policy – but are the policy benefits due Gary who purchased the policy, maybe without her knowledge, and who might not have an insurable interest in her life or are they due Robyn’s estate and her heirs? It will be interesting to see what happens.