Loss

Term Main definition
Loss

In insurance, the loss is a concept that is usually defined so that it provides limits in kind, description and amount on what shall be compensated by the insurance policy, at best, before considering existence of coverage

and before any exclusion/limit/retention/deductible of coverage.

Loss in insurance is not the same as loss in a common sense.

Loss requires a further causation of the loss, a concept called an "occurrence".  A loss that does not have an occurrence would be an incremental, constant, slow, perhaps continual process, that looks like ordinary wear and tear or depreciation of an asset. A loss is not insurable without an occurrence. 

 

Provided, not only must a loss occur, but it must also be one that is considered "insurable" which will definitely exclude a purchase of insurance by one person against loss on assets of third parties where the insured does not own some insurable interest in property. Insurance would otherwise amount to a gambling contract, which would not serve the public interest, as expressed in every states' insurance laws.