The method or said it the methods and systems necessary in the process of replacement of losses, also have a variety the problem, mainly because of the many types of insurance that is marketed in the community, to accommodate the transfer of the risks it faces, that is:
Insurance protection can not be the object of seeking financial gain!
Application of the principle of indemnity is one attempt to control the faith-bad faith. Seek or take advantage of insurance for purposes of seeking financial gain, through manipulation of the amounts set-off.
The Principle of Indemnity is defined as a definite monetary compensation and sufficient to restore the financial position of the insured after the loss, the same financial position immediately before the occurrence of events such losses.
The replacement of loss of insurance is not likely to exceed the actual amount of losses that occurred (the implementation of Subrogation Principles and Principles Contributions will be supporting / Cololtary this Indemnity Principle.)
Replacement of losses will be equal to the amount of real loss is in the insured's natural. Even if a smaller number of successors, it must be caused by the application of the terms of coverage specified in the agreement document is the Policy.
The method or manner of payment / reimbursement of loss:
1. Payment by cash / cash
2. By way of repair of improvements made by the Insurance Company.
3. Reinstate way of rebuilding damaged buildings due to the loss. The rebuilding was carried out by insurance companies.
4. By way Replace the election or replacement with a similar object.
In the insurance wealth, the sum insured should be conducted in accordance with healthy price of the insured object in question. Coverage under the healthy price will result in replacement of losses in a prorate.
For the futher understanding what I have been explaining above, it’s the best one if I take an example
Example:
I have a car that has been insured, then a few scratches when the car and i intend to replace my car with a perfect, by way of a claim to the insurance company for car replaced in their entirety. So the insurance company will reject it because i want to make a profit.
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