--- title: "is ensurance a type of insurance?" canonical_url: https://ensurance.app/guide/is-ensurance-a-type-of-insurance markdown_url: https://ensurance.app/guide/is-ensurance-a-type-of-insurance.md subtitle: "no. here is exactly what you hold, what you are owed, who is on the other side, and what it does not satisfy" category: ensurance --- # is ensurance a type of insurance? *no. here is exactly what you hold, what you are owed, who is on the other side, and what it does not satisfy* No. Insurance is a regulated contract in which an insurer promises to compensate you for a covered loss. With **[ensurance](/manual/ensurance?from=guide)**, nobody is contracted to pay you anything. What you hold is a recorded share in the funded present condition of one named place, or a currency whose trading funds a theme. No trigger, no limit, no claim. The hillside above the house, the wetland above the river town, and the forest around the reservoir do their work — holding soil, slowing water, keeping the slope — whether or not anyone writes a policy or holds a certificate. Insurance pays when that work fails. Ensurance pays for the work while it is still being done. Neither one is the hill. The confusion is fair. The word is one letter from insurance, and it borrows insurance vocabulary: policy, premium, line, underwriting. So the easy assumption is that ensurance is a policy that pays differently — sooner, or to nature instead of to you. It is not a policy that pays at all. It is a different object. :::johnson **a policy is a promise to pay after. a certificate is a payment for now.** Insurance owes you money when a covered loss happens. Ensurance owes you nothing; the money has already gone into the place that keeps the loss smaller. [see what a certificate is →](/manual/certificates?from=guide) ::: ## what an insurance contract is A property insurance policy is a **contract of indemnity**. A licensed insurer agrees, for a premium, to compensate the insured for a covered loss that happens during a stated term — up to a limit, after a deductible, subject to exclusions. The principle of indemnity aims to restore the insured to roughly the financial position they held before the loss. The insured needs an **insurable interest**: they must stand to lose money if the thing is damaged or destroyed. The insurer prices that promise on expected loss — how often, how bad — plus expenses and margin. It pools premiums across many insureds and holds reserves so the check clears. Regulators supervise its solvency and conduct. That is a good machine. It is why a family can rebuild in a season and why a bank will lend against a house. ## the two objects, side by side | | insurance | ensurance | |---|---|---| | **the document** | A policy: a contract between you and an insurer | A certificate — a recorded share in one named place — or a coin, a currency whose trading funds a theme | | **the promise** | Indemnity for a covered loss | None. A payment made, not a payment owed | | **the counterparty** | A licensed insurer holding reserves against claims | No one promising to pay. The place's account receives the money, the stewards are paid, and members share in distributions if and when the protocol makes them | | **the trigger** | A covered loss, adjusted after the event | None. The condition is funded whether or not a loss comes | | **the limit and deductible** | Yes, stated in the policy | Not applicable | | **the term** | Usually a year, then renewed, repriced, or not renewed | None. A policy certificate is on a committed path to permanent protection; a line can lapse | | **the price** | Expected loss, plus expenses and margin | For a certificate, the cost of protecting the place, set against the annual value of what the place does. A coin trades at its market price | | **tradable** | Generally not; assigning a policy usually needs the insurer's consent | Yes. Certificates and coins can be resold on a secondary market, which today is thin | | **what it satisfies** | A lender's, landlord's, or regulator's coverage requirement | None of those | On price: a certificate is issued against the yearly value of what a place does — water slowed, soil held, habitat kept — and priced on what it costs to protect. The ratio between the two is the [natural cap rate](/natural-capital?from=guide). It makes the place legible to capital. It is not a claim that the dollar figure is what the hillside is worth. One collision: ensurance also uses the word *policy*, for a certificate on a titled place. Same word, different object. Neither kind of certificate is an indemnity contract. ## what you are owed Nothing, in the indemnity sense. If the hillside slides, no one owes you a check under the certificate. That is the design, not a gap in it. A promise to pay later needs reserves held against a loss that has not happened. A payment made now has already gone to work: the crew rebuilding check dams, the landowner paid to let a low field take water, the monitoring that shows whether the slope is holding. What you hold instead is a place still doing its work, and a position whose value follows the place's condition and the market for it. Condition can decline and markets can be thin; nothing here promises a return. Distributions, if and when the protocol makes them, reach **members** only — holders whose certificates sit in a wallet connected to their own protocol account; a holder who buys through an outside marketplace without one is not eligible. For the capital view, see [the position that funds the thing that shrinks the loss](/guide/fund-the-thing-that-shrinks-the-loss?from=guide). ## who is on the other side Not an insurer. Not us, standing behind a payout. On the other side of a certificate is the place's own account — an **agent**, in the protocol's words: an account a place, a people, or a purpose holds in its own name. Not the insurance meaning of agent, the intermediary who sells you a policy. Money paid for a certificate goes to that account, and [proceeds](/proceeds?from=guide) route from there to the stewards doing the work. Each certificate maps to exactly one agent; if the agent cannot be named, no certificate is issued. Beside the account stand the other holders. They share an interest in the same place's condition. They are not a pool waiting to pay each other's claims. A [coin](/manual/coins?from=guide) sits one level up: a currency whose trading funds a theme — rivers and lakes, water abundance — rather than one named place. ## policies and lines Certificates come in two kinds. The difference is the legal relationship to the land underneath. | | policy | line | |---|---|---| | **what it funds** | A specific titled natural asset: a parcel, an easement, an ecological polygon | A place with no single cooperating titleholder, or a people, or a purpose | | **titleholder** | Required and cooperating. The policy is written with the owner | None required | | **premium** | Yes — on policies only | No premium | | **ensured state** | Ensured, with the entrust pathway committed | Ensured to varying degrees. Can lapse | | **where it can end** | Entrust: permanent protection through real property law | Lapse back to unensured, or graduate: the owner commits, a policy is written, the line becomes legacy. Lines do not reach entrust | Every place sits in one of three states: unensured, ensured, or entrust. A **premium** here is a recurring payment on a policy that funds the place's protection and can build toward permanence ([mechanics](/manual/ensurance?from=guide)). It does not buy a promise to be paid. It pays the place. ## what it does not satisfy A certificate or a coin does not satisfy a mortgage lender's hazard-insurance requirement, a landlord's lease clause, or any coverage a regulator requires you to carry. It does not pay anyone after a loss. It is not proof of insurance. How a certificate or a coin is treated where you live is a question for your counsel; this post describes what the instruments are and do, and does not classify them. The full list of limits: [what ensurance cannot do](/guide/what-ensurance-cannot-do?from=guide). ## keep the policy. the hill is a different line You keep your insurance. Ensurance sits under it. The policy is the check the morning after — liquidity, a roof rebuilt in a season, a loan that stays in good standing. The certificate is money that went into the slope, the wetland, or the forest years earlier, so the morning after is less bad, comes later, or does not come. A wetland does not stop every flood. It can slow the water and lower the peak, most of all in smaller floods; the largest events still arrive. The house still needs its policy. The slope behind it needs someone paying for its work. The risk stays where the water and the fire are ([it never moved](/guide/there-is-no-risk-transfer?from=guide)). What changes is when money arrives and what it touches — the argument in [nature finance has a timing problem](/guide/finance-has-a-timing-problem?from=guide). ## how big this is Small. Today ensurance is one participant, small volumes, and live certificates on a small number of named places. Coins, certificates, the accounts places hold, and proceeds routing are built and running; the valuation behind the prices has been run on real parcels since about 2022. Deeper markets are designed, not built. Read this as a description of a new object, not a track record. ## frequently asked questions ### is ensurance a type of insurance? No. Insurance is a contract of indemnity: a licensed insurer promises to compensate you for a covered loss, up to a limit, during a term. Ensurance makes no promise to pay. It funds the present condition of a named place, and you hold a record of that funding. ### is an ensurance certificate an insurance policy? No. A certificate has no insurer, trigger, limit, deductible, or term. Ensurance does call one kind of certificate a *policy* — written with the cooperating owner of a titled place — but it funds the place. It does not indemnify the holder. ### does ensurance pay out after a disaster? No. The money moves before, into the place's condition. After a disaster, your insurance pays. Ensurance can make the loss smaller or later by funding the hillside, wetland, or forest that buffers it. ### can ensurance replace my homeowners or property insurance? No. It does not cover your house, pay claims, or satisfy a lender's or landlord's coverage requirement. Keep your policy. ### who pays me if the place is damaged? No one, under the certificate. Your property policy pays for covered damage to your property. If the place a certificate funds is damaged, the money already spent there stays spent, and the certificate's value can fall with the place's condition. ## read next [The same flood, two instruments](/guide/the-same-flood-two-instruments?from=guide) follows one river town, the wetland upstream, a policy, and a certificate through the decade before and the morning after. Full definitions: [certificates](/manual/certificates?from=guide) in the manual. ## sources [NAIC — glossary of insurance terms](https://content.naic.org/glossary-insurance-terms) — principle of indemnity, insurable interest, deductible ## the series Read first: [what is ensurance?](/guide/what-is-ensurance?from=guide) 1. [ensurance vs insurance](/guide/ensurance-vs-insurance?from=guide) 2. [is ensurance a type of insurance?](/guide/is-ensurance-a-type-of-insurance?from=guide) 3. [the same flood, two instruments](/guide/the-same-flood-two-instruments?from=guide) 4. [the four things you can do with a risk](/guide/the-four-things-you-can-do-with-a-risk?from=guide) 5. [insurance terms, pointed earlier](/guide/insurance-terms-pointed-earlier?from=guide) 6. [what ensurance cannot do](/guide/what-ensurance-cannot-do?from=guide)