A term used to describe the condition that exists when an insured has purchased coverage for more than the actual cash value or replacement cost of a subject of insurance. It is also used to describe a situation where so much insurance is in force as to constitute a moral or morale hazard, such as having so much Disability Income Insurance in force that it becomes profitable to be disabled.
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When an individual has coverage for more than the value of item that is insured. This term can also refer to an individual who has so much insurance it poses a moral hazard; for example, a person who has so much disability insurance that they exaggerate symptoms to linger on disability status.