There is first and third party insurance. Life insurance is 1st party. Health insurance too. In Texas, the application of the policy may or may not be the contract. Sometimes the application and policy equals a contract. Other times just the policy is enough. Section 705.103 says both must be present “life insurance policy must be accompanies by application”. Page 631 – “a life insurance policy must be accompanied by a copy of the applications along with questions and answer” – 205.103. Article 1101.003 states a life insurance policy must provide that the policy or it must provide that the policy and the application constitute the contract. Two questions involve binder and conditional receipt. What is a binder or a conditional receipt? Agent takes policy and gives her a binder. The elements of a contract are: offer and acceptance, meeting of the minds, mutuality, and, intent.
Another name for binder is conditional receipt. If it is a conditional receipt. A binder in Texas creates temporary insurance. Even though they haven’t investigated and there is no promise to insure Mary. This binder is called a legal fiction. If you give someone an application and that person completes the app and that person gives you the first premium, in Texas, we have temporary insurance. These fall under personal injury because the applicant of either fraud or bad faith or malice.