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matters of avoidance) trans. denied.  Therefore, we hold that if an insured has actual knowledge that a loss has occurred, is occurring, or is substantially certain to occur on or before the effective date of the policy, the known loss doctrine will bar coverage.  This is not to say, however, that parties may not explicitly agree to cover existing losses.  Indeed, the known loss doctrine is inapplicable “if the insurer also knew of the circumstances on which it bases the defense.”  Russ and Segalla, supra, §102:8 at 23.

Applicability of the Known Loss Doctrine to Housewares’ Policies

Housewares properly notes that exceptions, limitations, and exclusions in an insurance policy must be plainly expressed.  Erie Ins. Co. v. Adams (1997) Ind.App., 674 N.E.2d 1039, 1041, trans. denied.  Apparently, there is no language in Housewares’ policies concerning the known loss doctrine.6  Thus, Housewares insists that the known loss doctrine should not be applied to its policies.  We disagree.

As earlier noted, fortuity is a concept inherent to insurance.  “Insurance has been defined as a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from an unknown or contingent event.”  Meyer v. Building and Realty Serv. Co. (1935) 209 Ind. 125, 134, 196 N.E. 250, 253-54, trans. denied (emphasis supplied).  “Implicit in the concept of insurance is that the loss occur as a result of an event that is fortuitous, rather than planned, intended, or anticipated.”  Russ and Segalla, supra, § 102:7 at 17.  Insurance is “applicable only to some contingency or act to occur in [the] future.”  Black’s Law Dictionary 721 (5th ed. 1979).  Thus,

6  Appellant’s Brief contains no citation to the policies in the record; nor could we find in the record any copies of the policies in question.  However, both parties seem to agree that the policies in question contain no language concerning known losses.

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