Understanding Severability of Interests in Insurance Policies

Severability of interests is a term used in insurance policies stating that the insurance policy applies to each insured person as if each had a separate insurance policy. This policy covers one insured person against another on the same policy.

Separate Policies

Severability of interests treats every insured person as if he owned his own insurance policy. This type of clause is found in most types of insurance plans, including auto, business and homeowner's.

Liability

This type of clause in an insurance policy keeps each insured party separate from each other. In other words, one insured person is not held liable for another insured person's accident or claim. The person without the accident or claim is held without damage in any way.

Interpretation

Many court cases have happened where this issue of severability of interests is discussed. The term is capable of varying interpretations. Each state and insurance company has its own take on this clause's meaning.