INSURANCE. A contract whereby, for an agreed premium, one party undertakes to compensate the other for loss on a specified subject by specified perils.
"An agreement by which one party, for a consideration (which is usually paid in money either in one sum or at different times during the continuance of the contract of the risk), promises to make a certain , payment of money upon the destruction or injury of something in which the other par ty. has an interest." Corn. v. Wetherbee, 105 Mass. 149, 160.
An insurance in relation to property is a contract whereby the insurer becomes bound, for a definite consideration, to indemnify the insured against loss or damage, to a certain property named in the policy, by rea son of certain perils to which it may be ex posed. Dover Glass-Works Co. v. Ins. Co., 1 Marv. (Del.) 32, 29 Atl. 1039, 65 Am. St. Rep. 264.
"In fire insurance and marine insurance the thing insured is property ; in life or ac cident insurance, it is the life or health of a person. In either case neither the time and amounts of payments by the assured, nor the modes of estimating or securing the payment of the sum to be paid by the in surer, affect the question whether the agree ment between them is a contract of insur ance. All that is requisite to constitute such a contract is the payment of the considera tion by the one, and the promise of the other to pay the amount of the insurance upon the happening of injury to the subject by a con tingency contemplated in the contract ;" Cora. v. Wetherbee, 105 Mass. 160; Masonic Asso ciation v. Taylor, 2 S. D. 324, 15 N. W. 93 ; Physicians Defense Co. v. Cooper, 199 Fed. 576, 118 C. C. A. 50.
Any one sui juris and capable of contract ing generally may be insured, but insurance has been held not to be a necessary for which an infant might contract and be held liable against his option on coming of age; N. H. _ Mut.. Fire Ins. Co. v. Noyes, 32 N. H. 345; Monaghan v. Ins. Co., 53 Mich. 238, 18 N. W.
797. In recent years, contracts of insurance by married women have been generally held valid, usually under statutes; McQuitty v. Ins. Co., 15 R. I. 573, 10 Atl. 635 ; Queen Ins. Co. v. Young, 86 Ala. 424, 5 South. 116, 11 Am. St. Rep. 51; Commercial Ins. Co. v. Spankneble, 52 111. 53, 4 Am. Rep. 582; Char ter Oak Life Ins. Co. v. Brant, 47 Mo. 419, 4 Am. Rep. 328.
Any one otherwise capable of contracting may become an insurer, and formerly the business was largely conducted by partner ships, but, with the exception of risks taken at Lloyds (q. v.) and some other large part nerships, the business is now conducted, mainly, by insurance companies (q. v.), though, in England, quasi corporations or ganized under the Joint Stock Companies Acts insure under the authority of letters Patent securing limited liability. See Jona' STOCK COMPANY.
The insurer is sometimes called the under writer, and the insured, the assured. The agreed consideration is called the premium; the written contract, a policy; the events insured against, risks or perils; and the sub ject, right, or interest to be protected, the insurable interest. See these several titles. As to /insured and assured, see Connecticut Mutual Life Ins. Co. v. Luchs, 108 U. S. 504, 2 Sup. Ct. 949, 27 L. Ed. 800.
The policy is usually issued upon the ap plication (q. v.) of the insured in writing, which contains the statement of facts enter ing into and forming a part of the contract.
It is reasonable to stipulate in a fire in surance policy that, if any statements made by the applicant are untrue, the policy shall be void; Deming Inv. Co. v. Ins. Co., 16 Okl. 1, 83 Pac. 918, 4 L. R. A. (N. S.) 607.
A renewal reinstates the original contract with all its terms and also incorporates into it the new terms expressed in the renewal application and representations contained therein become part of the contract ; Metro politan Life Ins. Co. v. McTague, 49 N. J. L. 587, 9 Atl. 766, 60 Am. Rep. 661.