Insurance 101 – Chapter 8 – Volume 48 – The “Loss in Progress” Rule – 2

The “Loss in Progress” Rule – 2

In most first party situations the issue is when the loss manifested itself. When a loss is “known or apparent” before a policy of insurance is issued, there is no coverage.  For example, a building catches fire and burns to the ground on December 31. Two days later the owner, unaware of the fire, buys a fire insurance policy. The loss is neither “known or apparent” to the insured but he has no insurable interest in the property since a second fire could do no damage. Although the loss was unknown to the insured, it was no longer contingent. Because fire destroyed the property before the policy was acquired the insured could not have an insurable interest in the property. A property cannot be destroyed twice. If it has no value at the time it is insured its further destruction will leave a property that still has no value.

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library

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The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

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