What is Insurance?

 

  • Excess: An excess is an amount of each and every claim that is not covered by the policy, and the insured is expected to bear the amount of excess to his account.

  • Deductible: This is used to describe very large excess.

 

  • Policy Limit: Some policies limit the amount to be paid for certain events in the wording of the contract itself. E.g. “Not more than Rs.______ will be paid in respect of any one item.”

  • The Sum Insured: In polices having a sum insured (value declared for insurance), the insured cannot recover more than the sum insured even where the indemnity is a higher figure. This often happens where the policies have not been updated over several years.

 

  • Average: At the time of a loss, if the actual value of the property insured is found to be greater than the value declared for insurance, by virtue of the fact that the insurer has received premium for only a proportion of the risk, settlement will be made using the
  • following formula:

 

 

Cover Note:

 

Cover note is a document issued by an insurer providing Interim Cover pending:

  • Additional information
  • Issue of a Certificate of Insurance or the Policy Insurance

 

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