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Impaired Property
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Property is considered to be impaired when it has not been physically damaged, but either cannot be used for its intended purpose or has lost monetary value because it contains a defective product or the work performed on it is defective or inadequate, or because the insured has not fulfilled a contractual obligation.
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Impaired Risk
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In life and health insurance, when an applicant has a substandard physical condition or a hazardous occupation or hobby, he/she is an impaired risk. Many insurers avoid such risks, while others specialize in them.
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Inchmaree Clause
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A clause used in ocean marine policies to identify additional named perils beyond the basic marine perils. In the more recent hull insurance policies, the clause is now identified as the "additional perils" clause. The original clause grew out of a lawsuit brought in 1887 by the owners of a ship named "Inchmaree".
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Incurred Losses
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1)Events which have happened and which will cause claims to be made to insurers.
2)The total amount shown in an insurer's operating statement as its obligations for policy claims, whether paid or not, during a given period (usually one year). The composition of incurred losses in such a total is derived by the following formula: losses paid during the year, plus loss reserves existing at the end of the year, minus loss reserves existing at the beginning of the year.
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Indemnify
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To pay for loss suffered, or to reimburse.
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Indemnitor
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In surety bonds, a person or company entering into a written agreement with a surety to hold that surety harmless from any loss or expense it may incur on a bond issued on behalf of another.
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Indemnity
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Indemnity is when the person or party suffering a loss is paid or reimbursed for that loss, the purpose being to restore that party to the condition that was present prior to the loss. In a life insurance contract, the payment made to a beneficiary is called indemnity.
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Independent Agent
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A property-casualty insurance producer who sells insurance as an independent contractor while representing one or more insurers of that agent's choosing on a commission basis, and who owns the expiration records of customers served. The independent status is further illustrated by the selling functions performed, which are not directed by the insurer, as would be the case if the agent were an employee. Those functions include contacting prospective insureds, effecting insurance, issuing policies, collecting premiums (in many or most cases), settling some losses of small amounts,and generally representing the insurers in the agent's community as part of the American agency system. By contrast, the direct writing insurer directs the selling functions of its agents, known as exclusive agents, and owns the expiration records.
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Indirect Loss
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A type of loss that does not result from direct damage of a covered cause of loss or peril but is, instead, a consequence of the direct damage loss. To illustrate, if a restaurant burns to the ground from a fire, that is the direct loss; however, the income lost because the restaurant could not operate is the indirect loss.
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Inflation Guard Endorsement
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Language which may be added to a homeowners policy for an additional premium to extend the coverage by increasing the limits of liability quarterly (by 1%, 2%, or some fixed amount) to offset inflation.
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Inherent Vice
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The characteristics of any physical property which are expected to cause deterioration or damage to that property without outside help, e.g., milk sours eventually, and wooden houses depreciate over time, Excluded by most insurance policies.
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Injury
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An act which damages or destroys a person or property.
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Inland Marine
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1)The insurance of property (generally on an "all-risk" basis) which is in the course of transportation or is of such a nature that it may easily be transported. Also includes some risks at fixed locations considered "instruments of transportation or communication," such as bridges, tunnels, neon signs, and street clocks, etc., which were accepted as inland marine by custom.
2)Originally meant the insurance of goods in transit "inland", instead of at sea, by underwriters who specialized in ocean marine insurance.
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Insolvency Fund
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An amount of money assessed certain insurers in a given state to reimburse policyholders and claimants of an insolvent insurer in that state. The fund may be created before an insolvency occurs (pre-assessment, as in New York) or afterward (post-assessment), and virtually all states now have such protection. Also called a guaranty fund.
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Insurable Interest
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A potential for financial loss from a certain event which a person must have before acquiring insurance against that event. The event may be illustrated by the following: the destruction of property owned (in fire isurance), the incurring of legal liability for negligence in causing loss to others (in liability insurance), the compliance with law (in workers compensation insurance), the loss or impairment of human life value (in Life Insurance, disability insurance, and annuities), or expenses fortuitously incurred (in hospitalization insurance). In life insurance, the applicant of the policy must suffer a financial loss, or the loss of love and affection, by the death of the insured.
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Insurance
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The transfer of risk, or chance of loss, from one party (the insured) to another party (the insurer), in which the insurer promises, usually specified in a written contract, to pay the insured, or others on the insured's behalf, an amount of money, services, or both, for economic losses sustained from an unexpected (accidental) even, during a period of time for which the insured makes a premium payment to the insurer.
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Insurance Agent
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One who has the authority to act for another. In insurance language, an agent is the person who sells insurance by contacting the policy holder. By contract and by law, the agent is endowed with many of the powers of the company itself. There are various different types of agents, based upon the contractual relationship with the insurer they represent.
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Insurance Broker
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A licensed, legal representative of the insured who negotiates with underwriters on behalf of the insured. The broker receives a commission from the insurer (underwriter).
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Insurance Company
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An organization chartered by state law to operate as an insurer in some of the principal types of insurance: life, fire, marine, casualty, and surety. Reciprocals and Lloyds syndicates permitted under many state laws are not companies, nor are they corporations.
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Insurance Contract
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The written contract or insurance policy between the insured and the insurer detailing the coverage provided, exclusions and limitations, conditions in case of loss, and other details pertinent to the terms of the agreement.
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Insurance Department
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That department of a state government which has charge of enforcing the laws governing insurance. Usually run by either an elected or appointed official called the superintendent or commissioner of insurance.
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Insurance Exchanges
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Exchanges established by law in New York, Illinois and Florida (and considered elsewhere) to provide facilities at a fixed location patterned after Lloyd's of London. Through insurance exchanges, buyers can secure insurance from insurers generally in the form of underwriting syndicates, which are members of the exchange.
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Insured
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The person(s) or party(ies) protected by an insurance policy, synonymous with assured. Some property-liability policies distinguish between the named insured and other insureds.
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Insured Loss Ratio
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Term used by an insurer when evaluating what portion or percent of that insured's losses are reinsured as compared to earned premium.
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Insured Peril
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Those causes of loss, such as fire, explosion, or accident that are covered by the insurance contract. In many standard property insurance policies, peril is now called cause of loss.
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Insurer
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The insurance company or other organization, such as a syndicate, pool or association, providing insurance coverage and services.
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Insuring Agreement
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The portion or section of an insurance policy that details what is covered by the contract for causes of loss or perils, subject to other provisions such as exclusions, limitations, and conditions.
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Insuring Clause
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That portion of a policy which describes the risk which the insurer has agreed to assume.
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Insuror
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A term adopted and used by some agents to enhance their public image as persons who represent insurers in effecting contracts of insurance between insurers and insureds. As such, insuror may be considered a misnomer when confused with insurer, which is reconized in statutory law as the party to an insurance contract which undertakes to indemnify for losses incurred by, or to provide services to, the other party to the insured contract (the insured). Thus, an insurer is a risk-bearing party in an insurance contract, while an insuror is not. Two state associations of insurance agents, Tennessee and Colorado, use insuror in their title.
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Intentional Injury
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Depending upon the type of insurance,
1)Injuries that are caused intentionally or with intent to harm or injure; or
2)Self-inflicted injuries,
either of which is usually considered excluded by its respective policy type.
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Services