Policy

In insurance. The Instrument whereby insurance is made by an underwriter in favor of an assured, expressed, implied, or intended, against some risk, peril, or contingency in reference to some subject. It is usually either marine, or against fire, or on a life. (1) An interest policy is one where the insured has a real, substantial, assignable interest in the thing insured. (2) An open policy is one on which the value is to be proved by the assured.

1 Phil. Ins. §§ 4, 6, 7, 27, 439, 948, 1178.

By an "open policy" is also sometimes meant, in the United States, one in which an aggregate amount is expressed in the body of the policy, and the specific amounts and subjects are to be indorsed from time to time. 12 La. Ann. 259; 19 N. Y. 305; 6 Gray (Mass.) 214. (3) A valued policy is one where a value has been set on the ship or goods insured, and this value inserted in the policy in the nature of liquidated damages. In such a policy, the value of the subject is expressly agreed, or is, as between the parties, the amount insured. (4) A wager policy is a pretended insurance, founded on an ideal risk, where the insured has no interest in the thing insured, and can therefore sustain no loss by the happening of any of the misfortunes insured against. These policies are strongly reprobated.

3 Kent, Comm. 225.