Usually people subscribe to insurance policies without being aware of the general conditions related to it. In the case of a multi-risk insurance policy, many pertinent questions can be asked such as:
- How are the risks assessed?
- How are the ownership rights transferred?
- What are the obligations of each party in the occurrence of a claim?
- What is a claim assessment?
- When to do it?
- How are the loss settlements paid?
In this article, the above are some of the questions we will be addressing, to enable us have a profound understanding of multi-risk insurance policy and how a coverage can be personalized.
1) THE DECLARATION OF THE RISK:
- The contract is established on the basis of the information furnished by the insured and the premium is determined accordingly. You must therefore:
- Give precise answers to the questions asked by the insurer relating to the circumstances surrounding the risk to be covered by them;
- In the course of subscription of contract, always declare any new information relating to the risk with questions having the consequences of either aggravating or creating new risks and thereby rendering the coverage accurate or null and void in relation answers previously provided to the insurer .It is imperative that new information be provided within a period of 15 days before the policy is concluded and signed.
2) RISK SHARING (CO INSURANCE)
In cases of high risk policies, in which the insured requests for a co-insurance with another insure. This must also be notified within the prescribed deadlines.
3) TRANSFER OF OWNERSHIP
In the event of transfer of ownership of the goods insured as a result of death or bridge of contract the cover continues for the benefit of the heir or purchaser with the latter having the responsibility of performing all objectives required vis-à-vis the company by virtue of the contract
- The Insurer or purchased can decide to terminate the contract
- The company has a maximum of three months to transfer the policy to the new owner from the day of the request
- If the insurance policy continues with more than one purchaser, they are all liable for the premium payment
4) OBLIGATIONS IN THE EVENT OF EACH CLAIM
As soon as the claim occurs, it is in the responsibility of the insured to safeguard at all cost, all other goods insured from getting even more damaged
For this to be effective you have to:
- Notify the insurer as soon as you become aware of a claim with receipts
- Indicate if you have the name and address of the injured 3rd parties and witnesses if possible
- Send a claim declaration as soon as possible indicating the date, circumstances surrounding the accident, the cause (known or presumed), the nature and approximate amount of repairs
- Communicate with the insurer all documents necessary for the loss assessment
- Send to the insurer all notes, letters, summons, prosecutions, judiciary and extra judiciary hearings and documents sent to the insurer engaging him liable to the claims
5) RISK REDUCTION
In the course of determining the premium after the insured has disclosed some aggravated facts surrounding the risk but at the time of validating the policy the above disclosed facts don’t feature, the insured has the right of resiliating the contract without payment especially in the case where the insurer does not adhere to a reduction in the agreed premium.
However, the premiums can be reduced by an endorsement, when a significant reduction of the disclosed risk is justified.
6) DETERMINATION OF ESTIMATE OF LOSS SETTLEMENT
The insurer guarantees only repairs of actual loss as a result of the accident. In the occurrence of a loss, the value of the goods insured is of utmost importance. In general the loss is determined by the actual value which is derived by reducing the depreciated value and excess deductibles as prescribed in the policy. In case of buildings constructed on third party premises, compensation of loss for reconstruction of the rented property is paid during work execution within a period of one year after the receipt of estimate of loss settlement.
7) LOSS ESTIMATION AND REPAIRS
As regarding the loss appraisals, if the damages cost is not determined by mutual agreement then an amicable settlement becomes obligatory.
Each party designates their experts but if the experts don’t agree with value of the loss settlements then a third expert is imperative
Each party is responsible for the honorarium of their experts but in the incidence of a third loss assessment the honorarium is shared. The 3rd expert is either designated by the opposing parties or the president of the competent court presiding over the matter where the accident occurred. The insured cannot abandon the insured goods whether damaged or intact.
8) LOSS SETTLEMENTS
After analyzing the degree of damages, the loss estimate has to be done. Failure to obtain the loss estimate within the period of three months gives the insured the right to request for interest through a summon.
If within the period of 6months the estimate is not completed then they can proceed with litigations. The loss settlement has to be effected within a period of 60 days after the acceptance of offer of settlement by the parties or court deision.
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