Steps to be taken in case of an accident:
Claim and Loss:
A claim is a request for an amount to be reimbursed filed by insured and addressed to the insurer.
Loss is the occurrence of an insured event, such as a fire, which results in financial disadvantage for the insured.
Indemnity means, to save from loss or harm. Insurance policies are contracts of indemnity which means that insurance companies intend to provide financial compensation for a loss which the insured has suffered and put them in the same position after the loss as they enjoyed immediately before it.
In policies issued on Reinstatement basis, the insurers will pay a sum equivalent to the cost of rebuilding or replacing the property to a condition like new but not better or more extensive than new.
Defined by Swiss Re as an occurrence which claims more than 20 lives; badly injures more than 50 people, make more than 2000 people homeless or cause insured damage of over $29M or a total loss of over $ 457M.It includes natural risks like floods, storms, earthquakes, droughts, bush fires and cold weather.
This reserve covers claims that have been incurred and reported to the insurer. It is the estimated liability in respect of these claims.
This reserve covers claims that have been incurred but not yet reported to the company. This reserve is calculated by using statistical techniques based upon the past experience.
Every person should have legal & financial interest in the subject matter to be insured. Any person insuring the property in which he does not have insurable interest would increase moral hazard.
In simple terms it means that the insurer and the insured have a duty to deal honestly and openly with each other in the negotiations that lead up to the formation of the insurance contract. Parties have the duty
Every circumstance is material which would the judgment of a prudent insurer in fixing the premium or determining whether he will take the risk.
Burden of proving the loss remains with the insured, he must establish two things:
It is describe as the active, direct, immediate, dominant, operative or efficient cause of the loss. In simple words it is the main and most powerful cause of loss.
An average clause provides that where the sum insured is less than full value, the insured will bear the uninsured part of the risk and the claim payment for any loss will be scaled down proportionately. This clause is also called pro rata average clause.
It provides that the insured must bear the first amount of any loss, expressed either as a sum of money or a percentage of the loss. Excess could be voluntary or compulsory.
It is the right of insurance company, having paid the loss under the policy, to stand in the place of insured and purse legal right or claim against other persons for the same loss.
The right of the insurer to take over the subject matter after partial or total loss is known as salvage.
Contribution prevents the insured from making a profit from his loss. It is the right of the insurer to call upon other insurance companies not necessarily equally liable to the same insured to share the cost of claim payment. Contribution will arise only when the following conditions are satisfied:
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