What is first risk insurance? Calculation of insurance compensation. The convenience of this type of insurance for insuring property stored in a warehouse
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First risk system in insurance
Insurance makes it possible to compensate for damage in its material terms in case of damage or loss of property.
But you need to take care of this in advance by concluding an agreement with the organization providing these services. It is extremely important that she is completely trustworthy.
Payments of insurance compensation under the contract depend to a large extent on which system is used. One of the most beneficial, both for the client and for the organization, is the first risk system in insurance. insurance financial risk
Types of insurance
In insurance practice, a wide variety of cases of concluded contracts are known.
Their subject matter can be either material or intangible. However, there is a generally accepted classification.
All types of insurance can be divided into the following groups:
· Personal - life, health, pension, medical insurance;
· Property - protection of real estate, cars, production items;
· Risks - financial, business and specific;
· Responsibility - civil, professional.
Insurance can also be compulsory or voluntary.
The occurrence of an event provided for in the contract obliges the insurer to fulfill its part of the agreement - to make payments.
The timing of fulfillment of obligations and the amount of compensation depend on the terms of the contract. It appoints a beneficiary - a person in whose favor the funds will be accrued.
Insurance systems and the concept of risk
When concluding a contract, you can choose different methods for calculating insurance compensation. Based on this principle, the following main insurance systems for property owned by individuals and legal entities are distinguished:
· replacement cost;
· actual value;
· fractional part;
· first risk;
· proportional liability.
The last two of these systems are in greatest demand among customers. They are often chosen for compulsory insurance of property and industrial items.
The first risk insurance system is used mainly to insure household contents and cars owned by individuals.
The company receives compensation for damage in the event of a fire equal to the amount of damage received, but the amount cannot exceed the amount of coverage.
CASCO car insurance is one of the types of voluntary insurance that covers risks associated with the safety of the vehicle in the event of events specified in the agreement with the insurance company. Read more about the CASCO franchise here.
The concept of risk is one of those used by insurance under the first risk system. It can be used in several meanings:
· as the possibility of damage to property or its complete loss due to the impact of various disasters, accidents or other events for which the contract was concluded;
· as objects to which the contract applies;
· as a liability assumed by the insurer;
· as the distribution of responsibility between the parties to the contract upon the occurrence of the event provided for in it.
Special risks are included in a separate group. They are discussed in a special order. These include, for example, possible dangers when transporting precious metals or works of art.
Risk assessment
To objectively assign an amount in a contract, it is important to correctly determine the amount of possible danger. For this purpose, the insurer has the right to study the insurance object itself, as well as the situation surrounding it.
Based on determining the probability of the expected event and the resulting financial losses, the amount (insurance premium) that the owner must pay is determined.
It must correspond to objective and subjective circumstances separately in each specific case.
To accurately determine the level of risk, the following are taken into account:
· statistics data;
· the strength of the influence of natural factors;
· actions of people;
· possible circumstances;
· amount of possible damage.
This type of protection is one of the systems of partial insurance. The total value of the property is not of decisive importance. The system allows you to distribute damage in case of loss or damage to property between the parties to the contract.
The policyholder does this deliberately in order to reduce the amount of required payments.
Definition of the first risk
The application of the system is based on the definition of two concepts: the first and second risk.
The parties involved in the execution of the contract assign a specific amount in monetary terms. In the text it is referred to as the sum insured and takes into account the actual value of the property.
If it is necessary to make compensation, the named amount becomes the starting point. Losses below the agreed limit are considered the first risk. They must be reimbursed in full.
The second risk is taken to be the amount of losses exceeding the agreed amount. The policyholder cannot count on her compensation.
Let's consider specific cases when the rules of this system apply.
The owners of two cars took out insurance for the same amount: 1 million rubles. After the traffic accident, both cars received significant damage. The damage to one car amounted to 700 thousand rubles, to the second - 1 million 200 thousand rubles.
The owner of the first car will receive compensation in full for the loss incurred - 700 thousand rubles. The second owner will also receive compensation. But it will not exceed 1 million rubles.
Contributions and compensations
Insurance contributions can be made in advance or in advance.
Advance payments are paid before the date when the next payment is due. They are paid in installments according to the scheme specified in the contract.
The preliminary procedure consists of making the payment in advance in full or in parts. Interest may be charged on the amount paid under the agreement.
The difference between advance and preliminary payments is significant. Sometimes an insured event occurs before the end of the payment period. In this case, the balance of the advance payment will be issued to the policyholder in addition to the principal amount under the contract.
There are no additional advance payments. They serve as compensation for the sum insured.
The marine cargo insurance contract, which is mandatory for maritime transport, is part of the trade transaction and can be drawn up simultaneously with the transportation contract.
The franchise is beneficial both to the insurance agency, which may not pay part of the costs, and to the owner of the vehicle. Read more about insurance deductibles here.
Compensation for damage
When an event stipulated in the contract occurs, payments according to the rules of the first risk system are subject to special laws.
The losses incurred in their material terms are divided into 2 parts. The boundary of the parts is the value equal to the insured amount.
The first part of losses includes an amount less than this amount. The insurer is obliged to fully compensate it. All other monetary losses are a second risk. They are not compensated under this system.
Compensation under the contract does not take into account the relationship between two quantities: the insured amount and the value of the property. Only the first of these quantities is significant. Typically, the first risk system turns out to be more beneficial for the owner of the property specified in the contract.
Fractional system
Combining the action of two different systems: first risk and proportional liability is used in a special method of insurance.
When applying it, the value of property is considered in two forms: insurance and shown.
When designing a fractional part system, 2 options can be used:
· insurance equals 100% of the actual value;
· shown is a part (fraction) of the real one.
The value of the value shown is usually written in the text of the contract in the form of an ordinary fraction or percentage.
When applying the first option, the rules for compensation of damage apply as for insuring the first risk. The rules of the proportional system begin to work provided that the contract is drawn up according to the second option.
Insurance organizations and the insurance market are one of the most important aspects of the state financial system. The responsibility of the insurer and the insured allows us to minimize the risk from possible unfavorable circumstances, from someone else's encroachment on property, from natural disasters.
The first risk system in insurance is just one of many ways to protect yourself and your property. Usually this system turns out to be more profitable for the owner than others.
It is used quite often and satisfies the desire for favorable conditions on both sides, both the insurer and the policyholder.
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Proportional liability insurance
SV = (actual amount of damage/cost.assessment of the object*insurable amount under the contract) - amount of unconditional franchise
SV=damage*(sum insured/actual amount)
SP=tariff*sum insured
First risk insurance
SV = amount of damage - amount of unconditional deductible,
Amount of damage = cost of property according to insurance assessment - discount on wear and tear + write-off costs (expertise, fire extinguishing) - cost of residues
Conditional deductible compares the amount of damage, does not carry out arithmetic actions.
Insurance rate:
The gross rate consists of a net rate (base part) and a load (guarantee premium)
1 Actual value – 100 units, sum insured – 80 units, loss 50 units. Coverage system – incomplete insurance
Insurance indemnity 50 units.
2 Actual value – 100 units, sum insured – 80 units, loss 50 units. Unconditional franchise – 10 units. Coverage system – incomplete insurance
Insurance indemnity: 50-10=40
3 Actual cost – 100 units, sum insured – 80 units, loss 100 units. Coating system – first risk
Insurance compensation: according to the 1st risk system is made in full, but within the limits of the insured amount, i.e. 80 units
4 Actual value – 300 units, sum insured – 150 units, loss 150 units. Unconditional franchise – 20 units. Coating system – first risk
Insurance indemnity: insurance amount - unconditional deductible. (which is always paid)= 150-20=130 units.
5 Actual cost – 250 units, sum insured – 200 units. Conditional franchise -10 units. Loss -9 units.
Insurance indemnity: conditional deductible > loss, which means the insured amount is not paid.
7 Sum insured -200 units. Wear and tear - 10%. Useful leftovers -50 units. There are no other terms of the contract and obligations of the insurance company
Insurance indemnity: insurance-wear-wear-good balances = 200-20-50 = 130 units.
8 Vehicle repair costs – 10,000 units. Additional costs for restoration repairs (paid according to the terms of the contract) – 8,000 units. Sum insured – 520,000. Actual cost – 650,000 units. Conditional deductible – 3% of the insured amount.
Insurance compensation: we compare the conditional deductible with the amount of loss, if it is more, we do not pay, if it is less, we pay. But first, let’s check the system in the contract, full or incomplete insurance. Loss=(10,000+8,000)*(520,000/650,000)=0.8*18,000= 14,400 units.
9 Agreement on voluntary insurance of beet crops with state support. Ultimate responsibility system.
The sowing area is 100 hectares, the average annual yield is 10 centners per hectare, the actual yield is 8 centners per hectare, the price of one centner is 500 units.
Insurance compensation is paid if the actual yield is 70% or less of the average annual yield
Insurance compensation: 10-8=2, and this is not a shortfall, 70%<80%, а значит и при господдержке not paid those. it should be 70% (but this does not happen).
1 product – when the bank has a loan and let’s insure, otherwise we won’t give a loan
2 product – state support 50% of the tariff is reimbursed
10 Vehicle insurance. Aggregate (the limit of the insured amount decreases with each payment) insurance amount 600,000 units. Insurance payments during the contract period are 60,000 and 260,000. Loss for a new accident is 360,000 units.
Insurance compensation=600,000 – (60,000+260,000)=280,000, 360 thousand units. will not be paid anymore, because limit (aggregate sum insured).
11 Agreement on voluntary insurance of beet crops. Ultimate responsibility system. (AGRICULTURAL INSURANCE)
The sowing area is 200 hectares, the average annual yield is 20 centners per hectare, the actual yield is 15 centners per hectare, the price of one centner is 500 units. The fact of sowing on the area and compliance with agricultural technology is documented. Damage is compensated at the rate of 70%.
Insurance indemnity = (average yield - actual yield) * sowing area * price of one hundredweight * 0.7 = (20-15) * 200 * 500 * 0.7 = 350,000 units.
12. Compulsory motor liability insurance agreement. Loss resulting from damage to a vehicle manufactured in 2014 in an accident – 220 thousand rubles. The victim can receive 220 thousand from the culprit (in civil proceedings) to pay for repairs, despite the culprit’s demand to collect 120 thousand from the insurance company. In court he will receive 100 thousand, and under insurance 120 thousand = 220 thousand.
1.1. The actual (insurance) value of the insured property is CU 128,500. Two proposals were received from different insurance organizations. The first option offered was insurance under a system of proportional liability and (with the consent of the policyholder) on the terms of incomplete insurance (70% of the insured value). The second offered insurance according to the first risk insurance system at full cost (with the consent of the policyholder). Both proposals provide for an unconditional deductible of 6% of the insured value.
The insured assessed both options in the event of significant damage in the amount of 90,000. Determine insurance compensation under the systems of proportional liability and first risk
According to the proportional liability system: 128,500*0.7 (70%)=89,950, SV=90,000/128,500*89,950=63,000 units. (Loss/st. property*NS). Unconditional deductible = 63,000-(128,500*0.06)=55,290 units. Payable 55280 units.
1.2. The building is insured for 200 thuya. Insured event fire. Wear and tear – 10%. Useful leftovers – 50 units. Expenses for salvage of property (fire brigade invoice including VAT - 15 tue.) An agreement on the transfer of ownership rights to the usable remains to the insurance company was not drawn up. Determine the loss accepted for calculating insurance compensation.
Wear = 200,000*0.1 = 20,000
Amount of damage = 200,000 -20,000 + 15,000 -50,000 = 145,000 units. (insurance amount-depreciation + VAT-annual balance)
2.1 An employee of the insurance company’s claims settlement department received documents for two clients who were involved in an accident. The insured event of the insurance company was recognized.
Data on contracts and documents of the service station. The cost of the vehicle (new) is 650tue. Sum insured 500 tue. The tariff rate is 7% of the sum insured. Franchise (conditional) - 3% of the insured amount. Discount on tariff due to franchise 4%.
Repair costs (service station estimate) Option 1-10,000 cu. Option 2 – 6,900 cu. In addition, for both options, restoration costs (addition to the service station estimate) are 8,000 euros (additional costs are provided for in the contract and are included in the amount of damage).
Determine for each option the loss, the amount of insurance compensation, and the amount of the insurance premium.
Actual loss =10,000 + 8,000 = 18,000 (1) and 6900+ 8000 = 14,900 (2)
SV= 18*(500,000/650,000)= 13.85 (1) thousand rubles and 144,900* (500,000/650,000)=11.46 (2)
Franchise = 500,000 * 8% = 40,000 both 1 and 2
Fear.poss. and 1 and 2 are not paid, because franchise< убытка
2.2. The vehicle is insured for CU 600,000. The insured event is the constructive loss of the vehicle. Wear and tear – 20%. Usable balances – 100,000 cu. Expenses of the insured for examination (agreed with the insurance company) – 3,000 cu. An agreement on the transfer of vehicle ownership rights to the insurance company was drawn up. Determine the amount of payment to the client (in the absence of other conditions and obligations).
Depreciation=600,000 *20%=120,000
Damage=600,000 – 120,000+10,000+3,000=493,000
3.1. Calculate net and gross vehicle insurance rates based on the following data:
Probability of SS occurrence – 0.05; The average sum insured is 150 euros, the Average insurance indemnity is 65 euros; the number of concluded contracts is 1200, the share of load in the tariff structure is 20%. Risk premium (with a standard deviation of 5 ue and a safety guarantee coefficient of -1.645) – 0.43%.
Net main part=0.05*(65/150)*100=2.167, net rate=main part+surcharge=2.167+0.43=2.6
Gross=(2.6*100)/(100-20)=260/80=3.25
3.2. The property is insured for a period of 1 year in the amount of 200. The actual cost is 250 cu. Insurance based on a proportional liability system.
The insurance contract provides for a conditional deductible “free from 5%” (i.e. 5% of the insured amount). Actual damage: Option 1-9; Option 2 -15 ue. Determine the amount of insurance compensation/
Deductible = 200*5/100 = 10 cu, then option 1 is not paid, option 2 SV = (15-10)*(200/250) the damage is greater than the deductible, which means the entire amount of damage is paid = 15 cu.
4.1. Beetroot sown on an area of 100 hectares is insured under a maximum liability system based on an average annual yield of 10 centners per hectare.
The actual yield was 8 centners per hectare, the price of one centner was 500 cu. The fact of sowing on the area and compliance with agricultural technology is documented.
Damage is compensated at the rate of 70%
Determine damage and insurance compensation
CB=(10-8)100*500*0.7=70,000, damage calculation:
Damage limit=100*10*500=500,000
Actual income level=100*8*500=400,000
Damage = 50,000-400,000=100,000
4.2. The vehicle is insured for CU 600,000. The insured event is the constructive loss of the vehicle. Wear and tear – 20%. Usable balances – 100,000 cu. Expenses of the insured for the examination (agreed with the insurance company) – 3,000 cu. An agreement on the transfer of vehicle ownership rights to the insurance company was drawn up. Determine the loss accepted for calculating insurance compensation.
600,000*0.2=120,000 – wear, 600,000-120,000+3000=37,700
5.2. The house is insured for 200 thuya. Insured event fire. Wear and tear – 10%. Useful leftovers – 50 units. The fire brigade's score is 15. An agreement on the transfer of ownership rights to the usable remains to the insurance company was not drawn up. Determine the loss accepted for calculating insurance compensation.
First risk insurance is one of the types of legally formalized and secured by agreements between the parties, providing for the protection of property and other interests of enterprises, firms and individuals (individuals) in the event of insured events (events specified in the contract, as a result of which the policyholder suffered damage). Insurance relations are regulated by the Federal Law of the Russian Federation 4015-1 (amendments and additions have been made and are valid from 01.09.2014).
To protect property (and other objects of insurance), receive guaranteed funds in the event of its loss or damage, the policyholder (owner of the property and other objects) contacts the insurer (insurance company) and enters into an insurance agreement. This is one of the ways to ensure economic security, create a reserve in case of losses and provide for possible financial losses.
Insurance contract
An insurance transaction concluded under an agreement involves two parties: the insurer (one of the insurance companies) and the policyholder (a legal entity or individual who signed the insurance agreement). The parties to the contract pursue a common goal: obtaining benefits from the emergence of insurance relations:
- Insurer – profit (from premiums and payments of the policyholder)
- Policyholder – coverage of possible (insurance) losses in the form of insurance compensation from the insurer.
The insurance scheme can also be tripartite - when a third party can become a beneficiary. For example, the employer provides insurance for its employees (against accidents). Here, the employer insures itself against payments to the employee’s family (if an accident occurs), and the employee acts as a beneficiary.
Insurance under the first risk system - features
The use of this scheme is possible in cases where it is difficult to determine the full insured value of property (objects), or expected expenses are insured, for example:
- Dismantling and demolition of destroyed buildings and structures
- Costs incurred as a result of firefighting
- When moving, when protecting objects
- Restoration of documentation (accounting, technical and other)
- Securities, cash
- Expenses incurred as a result of theft or robbery
- Personal property (things), vehicles of employees and clients of the organization (enterprise)
- And other similar costs and expenses.
Insurance for the first risk is insurance coverage that provides only for the payment that is specified in the contract (sum insured) and without taking into account the relationship between the established insurance amount and the insured value (only within the established insured amount).
Therefore, according to the agreement:
- the first risk - losses and expenses not exceeding the insured amount (and indicated in the contract) - are fully reimbursed by the insurer to the policyholder
- the second risk is costs and losses exceeding those established by the contract (not subject to insurance protection and coverage).
When concluding insurance contracts, it is necessary to take into account the characteristics of the insurance object and other mandatory parameters.
The amount, conditions and method of insurance compensation depend on the insurance liability system.
Proportional liability insurance determined by the formula:
Example 12. An object worth CU 180,000 is insured for CU 150,000. the damage amounted to CU 100,000. determine the amount of insurance compensation.
Solution:
Insurance based on the actual value of the property- insurance compensation is equal to the actual value of the property on the day the contract is concluded.
Example 13. The actual cost of the object on the day of conclusion of the contract is CU 200,000. The object is insured at its actual value. As a result of the fire, the facility was destroyed. Determine the amount of insurance compensation.
Solution:
Insurance under the fractional part system is determined by the formula:
Example 14. The actual cost of the object is CU 150,000. In the insurance contract, the value of the object is shown as CU 120,000. The actual amount of damage is CU 100,000. Determine insurance compensation.
Solution:
First risk insurance- insurance compensation is equal to the damage, but within the limits of the insured amount.
Example 15. The object is insured under the first risk system in the amount of CU 150,000. determine the amount of insurance compensation if the damage amounted to: 1) 90,000 rubles; 2) CU 180,000
Solution:
1) the damage does not exceed the insured amount (RUB 90,000 less than CU 150,000), which means the insurance compensation is equal to the amount of damage - CU 90,000.
2) the damage exceeds the insured amount (RUB 180,000 more than CU 150,000), which means the insurance indemnity is equal to the insured amount - CU 150,000.
Replacement cost insurance- insurance compensation is equal to the price of new property of the appropriate type without taking into account wear and tear.
Insurance under the maximum liability system is determined by the formula:
Example 16. The average cost of harvest per 1 hectare over 5 years in comparable prices is 120,000 rubles. the actual cost of the harvest per 1 hectare was 110,000 rubles. Insurance was used according to the maximum liability system; compensation for damage was determined at 70%. Determine insurance compensation.
Solution:
Insurance compensation for coinsurance (double insurance) (if the insured amounts taken together exceed the insurance assessment of the object) is determined by the formula :
Example 17. An object worth CU 160,000. insured with the 1st insurer for the amount of CU 100,000. and from the 2nd insurer in the amount of CU 80,000.
The damage amounted to CU 120,000. Determine the insurance compensation of each insurer.
Solution:
Total sum insured = 100,000+80,000=180,000. more than the cost of the object CU 160,000
Let us determine the amount of payment by each insurer:
Insurance compensation for co-insurance (double insurance) if the insured amounts taken together do not exceed the insurance assessment of the object) is determined by the formula:
Example 18. Object worth CU7,000,000 insured under one contract by two insurers: the first - for the amount of CU 3,000,000, the second - for the amount of CU 2,500,000. The insured event caused damage to the facility in the amount of CU 5,000,000. Determine the amount of payment to the policyholder by each insurer
Solution:
Total sum insured = 3,000,000 + 2,500,000 = CU 5,500,000 less than the cost of the object CU 7,000,000.
We will determine the amount of payment by each insurer.
Classification of property insurance| Types of insurance | Types of insurance | Insurance form | System of insurance relations |
| Property insurance |
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Mandatory and voluntary | Insurance; coinsurance; double insurance; reinsurance; self-insurance. |
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| and financial risks |
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General principles of property insurance
The essence of property insurance
Property insurance is a system of relations between the policyholder and the insurer for the provision of insurance services by the latter, when the protection of property interests is associated with the ownership, use or disposal of property. The economic purpose of property insurance is to compensate for damage resulting from an insured event.
According to the Civil Code of the Russian Federation, the following property interests can be insured under a property insurance contract:- risk of loss (destruction), shortage or damage to certain property (Article 930);
- the risk of liability for obligations arising from causing harm to the life, health or property of other persons, and in cases provided for by law, also liability under contracts - the risk of civil liability
(Articles 931, 932); - the risk of losses from business activities due to violation of their obligations by the entrepreneur’s counterparties or changes in the conditions of this activity due to circumstances beyond the control of the entrepreneur, including failure to receive expected income - business risk (Article 929).
Specific insured events are specified in the insurance contract. The nature of the insurance risk is established by agreement between the policyholder and the insurer.
Property insurance (comprehensively or separately) can cover:- the full cost of property damaged or lost as a result of an insured event or the cost of restoring damaged property;
- income (or part of it) that is not received by the policyholder due to damage or loss of property as a result of an insured event.
Insurance compensation is partial compensation for a loss. Insurance compensation cannot exceed the amount of damage to the insured property of the policyholder or a third party, unless the insurance contract provides for the payment of insurance compensation in a certain amount.
The basis for the insurer's obligations to pay insurance compensation is the presence of certain economic and legal consequences of damage, destruction or loss of the insured's property, i.e. the presence of a loss.
Sum insured- the amount of money determined by the insurance contract or established by law for which material assets are insured. Within the limits of the insured amount, the insurer is obliged to make a payment upon the occurrence of an insured event. The maximum amount of the insured amount is established by law: it cannot exceed the actual (insurable) value of the property at the time of concluding the contract. The insured amount must not exceed the insured value of the insurance object.
When insuring property, the insured amount is determined and stipulated in the insurance contract.
If the insured amount corresponds to the insured value, then the property is considered fully insured and losses are compensated in full. If the insured amount is less than the insured value, then the insurance compensation is paid within the limits of the insured amount.
The insurable value of real estate, production, technological and office equipment is determined as:- replacement cost, i.e. the amount required to purchase or manufacture a new object of similar type and quality;
- actual (residual) value, i.e. replacement cost minus the cost of wear and tear;
- market value, i.e. the sale price of the object.
The insured value of goods, raw materials, materials, finished products is determined based on the amount required to purchase them.
If the insured amount is higher than the insured value, then the insurer must demand an immediate reduction of the insured amount to the insured value with a corresponding proportional reduction in the insurance premium. By force of law, an insurance contract is recognized as invalid in that part of the insured amount that exceeds the actual value of the property at the time of conclusion of the contract. In this case, the excess paid part of the insurance premium is not refundable.
If it turns out that the overstatement of the insured amount is a consequence of deception on the part of the insured, then the insurer has the right to demand that the contract be declared invalid and compensation for losses caused to it in an amount exceeding the amount of the insurance premium received by it.
Insurance compensation- the amount of payment from the insurance fund to cover damage in property insurance and in the insurance of civil liability of the insured for material damage to third parties. Insurance compensation may be equal to or less than the insured amount, based on the specific circumstances of the insured event and the terms of the insurance contract.
The basis for payment of insurance compensation is the adjuster’s conclusion on the fact and circumstances of the insured event.
Adjuster- an individual or legal entity representing the interests of the insurance company in resolving issues related to the settlement of the stated claims of the policyholder in connection with the insured event. The adjuster seeks to reach an agreement with the policyholder on the amount of insurance compensation to be paid, based on the insurer's obligations under the insurance contract concluded by him.
The adjuster’s responsibilities are to establish (in connection with the insured event):- whether there was an insured event;
- involvement of the policyholder in the occurrence of the insured event;
- nature and extent of damage;
- reasons and conditions for the occurrence of an insured event;
- the presence or absence of circumstances giving rise to claims or objections of the parties.
There are four ways to recover damages: monetary compensation, repair, replacement, restoration.
The text of the contract usually gives the insurer the right to choose one or another form of compensation. The most commonly used form is monetary. It is advantageous to use “natural” forms of damage compensation in such types of insurance as glass, car, and real estate insurance.
To receive insurance compensation, the client must submit his claim for the insured event within the prescribed period and in the prescribed form. The insured event must be documented. For this, documents from the competent authorities are required (conclusion of the State Fire Supervision Authority, Technical Supervision Authority, relevant emergency service, expert opinion, resolution to initiate a criminal case, court decision or sentence, etc.). The documents confirm the existence of an insured event, the reasons for its occurrence and the person at fault. The responsibility for providing documents rests with the policyholder.
When settling a loss, the policyholder must ensure that:- the claim relates to the time of insurance coverage;
- the claimant is a valid policyholder;
- the event is insured under the contract;
- the policyholder has taken all reasonable measures to reduce the damage and there is no intent in the insured event;
- all additional terms of the contract have been met;
- none of the exclusions of insurance coverage established by the contract are applicable to this insured event;
- the value attributed to the loss is plausible.
The basis for determining the amount of insurance compensation is the actual value of the insured property on the date of the insured event. The insured amount for each insured object is compared with its actual value; in case of discrepancy, the principle of proportionality is used.
Losses are compensated:- in case of complete destruction or loss of all insured property - in an amount equal to the actual value of the lost property on the day of the insured event minus the value of the remaining remains suitable for use, but not higher than the insured amount;
- in case of damage to the insured property - in the amount of the cost of restoration (repair) in prices valid on the day of the insured event, within the limits of the insured amount.
Complete loss of property occurs if restoration costs exceed the actual value of the insurance object immediately before the occurrence of the insured event.
Restoration and repair costs do not include costs associated with changes, improvements, modernization or reconstruction of the insured property, auxiliary or preventive repairs, as well as other costs not related to the insured event.
Double insurance- this is an option for repeated insurance with several insurers of the same interest against the same risks, when the total insured amount exceeds the insured value of the object. The total amount of insurance compensation cannot exceed the amount of loss incurred by the policyholder, regardless of the number of policies purchased. There is a difference between the concepts of multiple and double insurance. Repeated, or additional, insurance occurs if the same interest is insured against the same danger during the same period in several insurance companies and the total insured amount for all contracts does not exceed the insured value of the object. Repeated insurance is not prohibited by law.
If the fact of double insurance was discovered before the occurrence of the insured event, the total insured amount under the contracts must be brought into compliance and not exceed the insured value. In this case, the policyholder may demand that the insured amount of the contract, which was concluded later, be reduced with a corresponding reduction in the insurance premium. Part of the insurance premium paid in excess is not refundable.
If the fact of double insurance is discovered after the occurrence of an insured event, the insurance is insignificant to the extent of the total insured amount that exceeds the insured value. Insurers are obliged to pay the policyholder insurance compensation, the total amount of which should not exceed the amount of damage. The amount of insurance compensation payable by each insurer is reduced in proportion to the decrease in the original insurance amount under the contract.
The insurance rules state that the policyholder is obliged to inform the insurer about all insurance contracts concluded in relation to the insured property with other insurance companies. The policyholder answers this question in the insurance application.
This provision may be included in the text of the insurance contract. Additionally, it is indicated that if the fact of double insurance is discovered, the insurance company is released from the obligation to pay insurance compensation under this agreement.
In the Russian Federation, in the presence of double insurance, insurers are liable within the insured value of the insured interest and each of them is responsible in proportion to the insured amount under the concluded insurance contract.
Insurance liability systems
The amount, conditions and method of insurance compensation for losses in property insurance depend on the insurance liability system.
Insurance liability system determines the relationship between the insured amount of the insured property and the actual loss, i.e., the degree of compensation for the resulting damage.
The following insurance liability systems are used:
- actual value system;
- proportional liability system;
- first risk system;
- fractional part system;
- replacement cost system;
- system of ultimate responsibility.
1. When insurance based on the actual value of property the amount of insurance compensation is determined as the actual value of the property on the day the contract is concluded.
Insurance compensation is equal to the amount of damage. Here full interest is insured.
Example. The cost of the insurance object is 5 million rubles. As a result of the fire, property was lost, i.e. the loss of the policyholder amounted to 5 million rubles. The amount of insurance compensation also amounted to 5 million rubles.
2. Proportional liability insurance means incomplete insurance of the value of the object.
The amount of insurance compensation under this system is determined by the formula
- SV - amount of insurance compensation, rub.;
- СС - insurance amount under the contract, rub.;
- СО - valuation of the insurance object, rub.
Example. The cost of the insurance object is 10 million rubles, the insured amount is 5 million rubles. The insured's loss as a result of damage to the object is 4 million rubles. The amount of insurance compensation will be: 5*4/10 = 2 million rubles.
With insurance under the proportional liability system, the policyholder's participation in compensation for damage is manifested, i.e., the policyholder takes part of the risk upon himself. The greater the indemnity at the risk of the insured, the lower the degree of insurance compensation. In other words, partial interest is insured here.
3. First risk insurance provides for the payment of insurance compensation in the amount of damage, but within the limits of the insured amount. According to this system, all damage within the insured amount (first risk) is fully compensated.
Damage in excess of the insured amount (second risk) is not indemnified.
Example. The car is insured under the first risk system in the amount of 50 million rubles. The damage caused to the car as a result of the accident amounted to 30 million rubles. Insurance compensation is paid in the amount of 30 million rubles.
Example. The property is insured under the first risk system in the amount of 40 million rubles. Insurance compensation is paid in the amount
40 million rubles
4. When insurance according to the fractional part system Two insurance amounts are established:
- sum insured;
- show value.
At the exemplary value, the policyholder usually receives risk coverage expressed as a fraction or percentage. The insurer's liability is limited to the size of the fractional part, so the insured amount will be less than its apparent value. Insurance compensation is equal to the damage, but cannot be higher than the insured amount.
In the case where the apparent value is equal to the actual value of the object, insurance according to the fractional part system corresponds to insurance of the first risk.
If the apparent value is less than the actual value, the insurance compensation is calculated according to the formula
- SV - insurance compensation, rub.;
- P—show value, rub.;
- Y—actual amount of damage, rub.;
- CO - valuation of the insurance object, rub.
Example. The cost of the insured property is shown in the amount of 4 million rubles, the actual value is 6 million rubles. As a result of the theft, the damage amounted to 5 million rubles. Insurance compensation is paid in the amount of 3.3 million rubles.
5. Replacement cost insurance means that the insurance compensation for the object is equal to the price of new property of the corresponding type. Depreciation of property is not taken into account.
Insurance at replacement cost corresponds to the principle of completeness of insurance protection.
6. Limit liability insurance means that there is a certain limit on the amount of insurance compensation. Under this security system, the amount of damages compensated is determined as the difference between a predetermined limit and the achieved level of income. Limit liability insurance is typically used for large risk insurance as well as income insurance. If, as a result of an insured event, the policyholder's income level is less than the established limit, then the difference between the limit and the actual income received is subject to compensation.
The Decree of the Government of the Russian Federation "On state regulation of insurance in the field of agricultural production" dated November 27, 1998 No. 1399 established that:- crop insurance contracts are concluded for a period of at least 5 years;
- the insured value is determined annually based on the sown area, yields over the previous 5 years, and the projected market price of agricultural crops for the corresponding year, and the insured amount is 70% of the insured value;
- insurance premium rates for agricultural crop insurance are set for 5 years, taking into account the prevailing fluctuations in agricultural yields from year to year depending on weather and other natural conditions;
- the excess of insurance premiums over the amount of insurance compensation for agricultural crop insurance provided with state support (taking into account the costs of running the insurance business) remains entirely at the disposal of the insurers and is used only to pay insurance compensation to agricultural producers in subsequent years if the current year’s payments are not enough.
When indemnifying crop losses, it is considered that crop losses in the amount of 30% (i.e., over 70%) are not related to the insured event, but are a violation of the production technology by the insured.
Example. The average cost of a carrot harvest in comparable prices was 320 thousand rubles. from 1 ha. Actual yield - 290 thousand rubles. Damage is compensated at the rate of 70%. Let's calculate the loss from the harvest: 320 - 290 = 30 thousand rubles. Hence the amount of insurance compensation is 21 thousand rubles. from 1 ha.
The insurance contract may include various clauses and conditions, which are called clause(Latin clausula - conclusion). One of them is.
Citizens' property insurance
Insurance conditions combine in one policy the risks of fire, theft, natural disasters, accidents, water penetration from other premises, intentional unlawful actions of third parties and others leading to death or partial loss of property. Such insurance contracts are subject to standard exclusions from insurance coverage that are common to all types of property insurance.
Insurance rates are calculated for each risk separately, then the overall tariff rate is calculated in relation to the “all risks” conditions, valid during the term of the contract.
Highlight three groups of insurance objects, into which the property of citizens is divided: buildings; apartments owned by citizens as private property; household property. Insurers can be owners of houses, apartments and auxiliary buildings, responsible tenants, tenants and renters of residential premises.
The insurable value of a structure is determined on the basis of its replacement cost at current prices, taking into account the amount of wear and tear. The cost of a privatized apartment is calculated at the full replacement cost, calculated on the basis of its total area and the average cost per square meter of area prevailing in a given region.
Household property in insurance is considered to be home furnishings, household items and consumer items intended for use in personal households to meet everyday and cultural needs, as well as elements of decoration and equipment of apartments.
There are two options for this type of insurance:
- under a special agreement The following is accepted for insurance: valuable and expensive property; collections, paintings, antiques; spare parts, parts and accessories for vehicles;
- under a general agreement, in which all types of household property are insured, with the exception of what is drawn up in a special contract, as well as elements of decoration and equipment of the home.
The insured amounts are established on the basis of the actual value of the property at the time of conclusion of the contract as a result of an agreement between the parties.
Features of the insurance contract:- the contract must indicate the address or territory in which the object is considered insured;
- residential premises insurance contracts are concluded for a period of one year, household property can be insured for a period from one month to three years;
- the insured amount during the validity of the insurance contract can be adjusted at the request of the policyholder, taking into account the level of inflation (increase in the insured amount or determination of the insured amount in dollar terms, subject to payment of compensation in ruble equivalent);
- policyholders are offered a system of discounts and benefits, which can be combined into three main groups: discounts for break-even insurance, benefits for continuous insurance, discounts for certain categories of clients (pensioners, disabled people, etc.) (Appendix 1).
Property insurance for legal entities
Property insurance of legal entities is divided by type of business entity: industrial and agricultural enterprises. The following are subject to insurance:- buildings, structures, objects of unfinished capital construction, vehicles, machinery, equipment, inventory, inventory and other property belonging to enterprises and organizations (main insurance contract);
- property accepted by organizations for commission, storage, processing, repair, transportation, etc. (additional insurance contract);
- farm animals, fur-bearing animals, rabbits, poultry and bee families;
- harvest of agricultural crops (except for natural hayfields).
The main contract applies to property owned by the policyholder (except for animals and crops). Under an additional agreement, property accepted by the policyholder from other organizations and the population and specified in the insurance application is subject to insurance.
An additional insurance contract can be concluded only if there is a main contract, which is why it is called additional. Its validity period does not exceed the term of the main one.
Commercial timber, firewood at cutting sites and during rafting, sea and fishing vessels while on routes of communication, documents, drawings, cash and securities are not insured.
An insurance contract for property owned by an enterprise can be concluded at its full value or at a certain share (percentage) of this value, but not less than 50% of the book value of the property.
The insurance contract for buildings is concluded at a cost not lower than the outstanding balance on loans issued for their construction.
The following property value estimates are used:- book value, but not higher than the replacement cost on the day of its destruction (for the assessment of fixed assets);
- actual cost at average market prices, selling prices and prices of own production (for assessing working capital);
- based on the actual costs of material and labor resources incurred at the time of the insured event (to assess construction in progress); at the cost specified in the documents for the acceptance of property (for the assessment of property accepted from other organizations and the population for commission, storage, processing, repair, transportation, etc.).
Property insurance is carried out in case of loss or damage as a result of fire, lightning, explosion, flood, earthquake, subsidence, storm, hurricane, rain, hail, landslide, landslide, groundwater, mudflow and accidents, including means of transport, heating, water supply and sewerage systems, as well as illegal actions of third parties.
In enterprise property insurance, rates are differentiated according to the industry of the insured. Reduced rates from 0.10 to 0.15% are applied if the company insures all of its property, but if only part of the property is insured (selective insurance), then payment rates increase significantly. Property insurance against burglary (robbery) and vehicles against theft is carried out at a special rate. The highest payment rates are provided for the insurance of machinery, equipment and other property during experimental or research work.
For enterprises that have insured property at full cost for 3-5 or more years and have not received insurance compensation, insurance premiums are reduced, applying in an amount corresponding to the duration of the break-even period. Discounts apply to property that meets fire safety requirements set out in regulatory and technical documents.
When insuring property for a period of up to 9 months, payments are calculated for each month in the amount of 10% of the annual rate, and when insuring for 10-11 months - in the amount of the annual rate.
Insurance compensation is paid for all lost or damaged property, including property received by the policyholder during the period of validity of the contract, regardless of the location of the property at the time of loss or damage. In the event of loss or damage to the insured property during transportation, insurance compensation is paid in cases where the legislation or the contract of carriage does not establish the carrier’s liability for loss or damage to the cargo.
Insurance compensation is paid for property accepted from other organizations and the population in the event of loss or damage only in places (shops, warehouses, workshops, etc.) specified in the insurance application, as well as during transportation of this property, for except in cases where the carrier is responsible.
The insured is reimbursed for expenses associated with rescuing property, preventing and reducing damage in the event of a natural disaster or accident (moving property to a safe place, pumping out water, etc.), as well as for putting the insured property in order after a natural disaster (cleaning, sorting, drying, etc.).
An agricultural enterprise can insure:- buildings, structures, transmission devices, power, working and other machines, vehicles, equipment, fishing vessels, fishing gear, inventory, products, raw materials, materials, perennial plantings;
- farm animals, poultry, rabbits, fur-bearing animals and bee families;
- harvest of agricultural crops (except for hay harvest).
Insured events of fixed and working capital for agricultural purposes are: death or damage as a result of flood, storm, hurricane, rain, hail, collapse, landslide, groundwater, mudflow, lightning strike, earthquake, subsidence, fire, explosion and accidents, and long-term plantings - in case of their death as a result of the disasters listed above, as well as drought, frost, diseases and plant pests. As well as a sudden threat to property, as a result of which it is necessary to disassemble it and move it to a new location. For fishing, transport and other vessels and fishing gear in operation, insured events include death or damage as a result of a storm, hurricane, storm, fog, flood, fire, lightning strike, explosion, accident, ice damage, as well as loss missing or stranded ships due to natural disasters.