Mataracy
VIP Contributor
The basic ingredient of indemnity are :
(a) A loss measurably in monetary terms must be sustained by somebody having interest in that subject matter of insurance. This is why life insurance policies are not termed to be contract of indemnity because no one can place ia value on life. But in property, liability and even marine insurances, they are all contracts of indemnity aubce actual pecuniary value could be placed on them.
(b) The indemnify payable must be at par with he loss suffered and the insured must price the extent of his loss.
There are factors that limts or prevent the insured from getting an indemnity that will be at par with the loss suffered.
(1) sum insured- Sum insured is the amount or value placed on the subject matter of insurance by the proposer. This value placed might be more that the actual market valu, it may be less and it may be equal to it.
(2) Excess - Thisvcould be voluntary or compulsory . it is voluntary when the insured himself demand for it while it is compulsory when it is imposed by the insurer having noticed some unfavourable features of a risk proposed for insurance.
(3) Average- For an insured to be adequately compensated, the sum insured must represent the fill value ate risk.
(4) Franchise - This is related to average and excess but the application is different. Franchise states that if the sum insured is equal to or more than a fixed amount at the time of loss, the insurer will pay the whole loss but of it is less than the fixed amount (Franchise) then the insured bears the loss without any parent from the insurer.etc. This are some of the features if indemnity. Your idea can also help a lot. Thanks.
(a) A loss measurably in monetary terms must be sustained by somebody having interest in that subject matter of insurance. This is why life insurance policies are not termed to be contract of indemnity because no one can place ia value on life. But in property, liability and even marine insurances, they are all contracts of indemnity aubce actual pecuniary value could be placed on them.
(b) The indemnify payable must be at par with he loss suffered and the insured must price the extent of his loss.
There are factors that limts or prevent the insured from getting an indemnity that will be at par with the loss suffered.
(1) sum insured- Sum insured is the amount or value placed on the subject matter of insurance by the proposer. This value placed might be more that the actual market valu, it may be less and it may be equal to it.
(2) Excess - Thisvcould be voluntary or compulsory . it is voluntary when the insured himself demand for it while it is compulsory when it is imposed by the insurer having noticed some unfavourable features of a risk proposed for insurance.
(3) Average- For an insured to be adequately compensated, the sum insured must represent the fill value ate risk.
(4) Franchise - This is related to average and excess but the application is different. Franchise states that if the sum insured is equal to or more than a fixed amount at the time of loss, the insurer will pay the whole loss but of it is less than the fixed amount (Franchise) then the insured bears the loss without any parent from the insurer.etc. This are some of the features if indemnity. Your idea can also help a lot. Thanks.
