Assured Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Assured, written in plain English, along with examples of how it is used.
What is Assured?
(adj) Assured is the quantum of monetary value which has been guaranteed on the occurrence of any said or expected future event to the person, entity, property, article, transaction etc, which has been insured for its insurable interest.
History and Meaning of Assured
Assured is a term commonly used in insurance law, referring to the guaranteed monetary value that a person or entity will receive in the event of an insured loss or damage that occurs. It is a crucial consideration when purchasing and selling insurance policies, as the assured value will determine the amount of compensation that the insurer will provide in the case of an adverse event.
The concept of assurance or insurance dates back to ancient times when traders would spread their cargo across multiple ships to avoid the risk of losing everything in the event of one ship sinking. Merchants, on the other hand, could invest in or sponsor a voyage by offering a percentage of the trip's proceeds in exchange for the promise of compensation if the ship didn't come back. In modern times, insurance contracts or policies contain assured amounts that are designed to protect policyholders against unexpected losses and to provide financial peace of mind.
Examples of Assured
- A homeowner's insurance policy might have an assured value of $500,000 to cover the structure of the house, personal belongings, and liability protection in the event of property damage or injuries sustained by visitors.
- A life insurance contract may have an assured value of $100,000 to provide beneficiaries with financial support in case of the policyholder's death.
- A commercial marine insurance policy may have an assured value of $2 million to compensate for the loss of cargo or vessel damage sustained during transit.
- A health insurance contract may have an assured value for certain medical procedures, medication, or hospital stays to minimize out-of-pocket expenses for policyholders.
- An auto insurance contract may have an assured value to cover the cost of damages caused by a policyholder in a car crash.
Legal Terms Similar to Assured
- Insurable Interest: The legal right to insure the property or life of another person with whom the insured has a relationship that is subject to the risk of loss.
- Face Value: The amount stated on the face of the insurance policy that represents the assured sum payable in the event of a specified event happening.
- Indemnity: A guarantee to compensate someone for loss, damage, or injury incurred, often used in the context of insurance policies where the insurer indemnifies the insured for actual losses sustained.