Often the day-to-day details of a relationship interfere with the big picture. Sometimes small things in life are overlooked; promises are broken; responsibilities put aside. Most of the time none of this matters. Someone picks up the slack and the job gets done one way or the other.

Occasionally, though, something slips through the cracks and lies dormant for years. Then, when we least expect it, the forgotten item emerges from the past and, depending on our situation, either pleases or horrifies us. This is exactly what happened to Alvin and Cynthia Sanderson. Cynthia and Alvin were married in 2004. It was Alvin's second marriage, and Cynthia's first.

Both of them had saved a substantial amount of money. Alvin had a handsome investment portfolio and a house in Pas Christian, Mississippi. Cynthia had a small inheritance that she had managed well over the years. After their marriage, they sold Alvin's home and bought a newer house in another part of Pas Christian, which they insured with a homeowners' insurance policy that did not include flood insurance. The couple also took out life insurance policies, naming each other as beneficiaries. Cynthia continued to pay the premiums even after the couple was divorced in 2006.

The divorce judgment contained an order that the couple's late model Lexus that was registered and insured in their names jointly "shall belong to Alvin outright." Cynthia received the Pas Christian house in the settlement where she continued to live after the divorce. Then disaster hit in the form of Hurricane Katrina.

First, the marital home was washed away in the storm. Then, while rushing back to Mississippi, Alvin was killed on the interstate. The state police reported that he was driving at a high rate of speed and was not wearing his seat belt at the time of the crash. The Lexus was totaled.

It was at this point that those day-to-day details began to emerge. An investigation revealed that the couple had never removed Cynthia's name from the insurance policy as the coowner of the car and that neither Alvin nor Cynthia had changed the beneficiaries on their life insurance.

As for the house, Cynthia had simply continued the same homeowner's insurance policy with no changes in coverage. Cynthia filed claims under all three policies. Madeline Sanderson, Alvin's mother, also filed a claim under Alvin's life insurance arguing that, after the divorce, Cynthia had no insurable interest that she could enforce. As you read this chapter on insurance, see if you can unravel who owes what to whom.

Opening Case Questions
1. Would a lawsuit like this be held in the state or the federal court? Explain.

2. Who will be able to recover the benefits on the life insurance? Madeline or Cynthia? Explain.

3. Does Cynthia have an insurable interest in the life insurance policy? Explain.

4. Will Cynthia be able to collect on the automobile insurance policy? Explain.

5. Will Cynthia be able to recover on the homeowner's policy for the loss of her home? Why or why not?