Contracts and Insurable Interests When you enter into an insurance policy you are entering into a legally binding contract. Policyholders or “the insured” makes specified payments to the insurance company or “the insurer” on a regular basis. These contractual arrangements, between an insurance carrier and the insured, compensate a person or party for damages or losses to a specified insurable interest. Payment arrangements for insurance policies can be arranged on a monthly, quarterly, annually or other schedule as determined by the contractual arrangement. Loss coverage and specific terms, conditions, exceptions and exclusion, as well as the definitions for terms and usage in the policy are all specified in the policy jacket, or contract. Items or situations not covered in an insurance policy are known as exclusions; exceptions are also commonly used … Read entire article »