The contract of property insurance - protection against unforeseen circumstances

Although it is most often a contract of insurance of personal property is under the pressure of banks, which requires insurance coverage if you wish to use a property or auto as collateral when accessing credit programs, this document becomes a reliable protection against various unforeseen situations. In this case, the destruction of property by third parties or force-majeure circumstances a citizen may regain its value, shifting the damages to the insurance company.

Liability Insurance

Concluding the property insurance contract, the policyholder may receive a payout in the case when the property and all the things in it are destroyed in the explosion or fire, flooding or other natural disasters. However, the insurance company usually reimburses only direct damages to the amount originally stipulated in the policy, but even after the compensation the insurer remains liable for the insured object and further, until the term of the agreement.

Varieties

Currently, the insurance contract may enter into as citizens and legal entities on a voluntary basis. The company may insure against the risk of damage to or destruction of property to such objects as air, water or ground transportation, as well as roaming with the help of the cargo. Citizens are encouraged the design of policies to protect them from damage or loss of garden houses and cottages, country houses and apartments of various vehicles and household goods.

Double insurance

Often individuals or companies try to enter into a contract of property insurance with multiple insurers to increase the amount of compensation when the insured event at times. However, if the payout percentage for the various companies will exceed the value of the insured property, the insured should not expect to receive huge compensation.

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So, the current legislation provides that in the case of “double” of insurance a person purchasing the policy is required to inform the company of all contracts relating to such property which were entered into in other insurance firms. In situations where the policyholder has not informed his agent in writing that the property is already insured in other companies, all policies may lose legal force.

Insurance coverage

Each insurance contract stipulates the amount of insurance coverage on the basis of the list of risks specified in the policy issued. The list of insurance claims is based on two methods including the elimination method, where the agreement specifies the cases in which compensation is not paid. The method of inclusion, by contrast, provides for payment of compensation only in case of occurrence of one of the insured events listed in the text of the Treaty, and in other situations, the company does not assume responsibility for loss of customer property.

Typically, the policy specifies the amount of franchise – part of that damage, which the client is paid. So, conditional franchise provides that upon the occurrence of property damage, the policyholder will receive compensation, if the damage exceeds specified in the policy the minimum threshold. And franchise unpaid part of the specified percentage in the contract.

Indemnification

Every insurance contract should include a description of procedures for redress, and, if the property is not insured for its full value, the insured will be paid only a certain percentage specified in the policy. In situations where the treaties provide for full compensation payments are made within the limits specified in the policy a specific amount.