August 17, 2017

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Indemnification

When insurance policies are written on an "indemnification" basis, the insurance company will reimburse the insured for claim costs already paid. Technically, the insured must not only suffer a loss, but must also pay the loss before being reimbursed (indemnified) by the company.

Indemnify

To reimburse or otherwise pay for an incurred loss.

Indemnity

Making whole. The act of reimbursing or otherwise paying an injured party for an incurred loss. In life insurance, the amount paid to the beneficiary is referred to as indemnity.

Indemnity Bond

A contract to pay or reimburse a third party for failure to perform or fulfill contractual obligations named in the bond.

Independent Agent

An insurance agent that is affiliated with more than a single insurance company. An independent agent is able to shop several insurance carriers for the best plan for a particular insured.

Inflation Guard Coverage

This coverage extension automatically increases the building amounts of insurance by 2% per quarter. This is done at no additional cost and is an attempt to keep pace with inflation.

Inland Marine Coverage

Inland marine insurance indemnifies loss to moving or moveable property and is an outgrowth of ocean marine insurance. Historically, ocean marine insurance held the transporter responsible for property loss before, during, and after the completion of the voyage. In the 1800's, the non-ocean portion of the journey grew as cargoes were transferred to barge, etc., and the term "inland marine" was coined. Inland marine policies became known as "floaters" since the property to which coverage was originally extended was essentially "floating."

Insurance

A contract by which one undertakes to indemnify another or to pay a specified amount upon determinable contingencies.

Insurance Audit

Sometimes factors that enter into determining appropriate premiums for insurance coverage can't be known in advance; therefore, accurate premiums for the coverage provided can't be billed by the insurance carrier. This often is true in the case of Worker's Compensation and Product Liability insurance, where such things as payroll and sales can't be determined ahead of time. An audit serves as an examination of the insured's records after the fact to adjust the initial premium billed to reflect the actual coverage.

Insurance Fraud

Insurance fraud is any act or omission with the purpose of illegally obtaining a property and casualty insurance benefit. This definition encompasses the full range of fraudulent acts, from completely fabricated claims, to inflation or padding of legitimate claims, to false statements on insurance applications, to internal fraud.