Knowledge Zone

From “THE AVERAGE CONDITION” By Celia Griffith

100% Insurance

Sum Insured = $600,000
Rebuilding Cost = $600,000

75% Insurance

Sum Insured = $450,000
Rebuilding Cost = $600,000

50% Insurance

Sum Insured = $300,000
Rebuilding Cost = $600,000

what will i be paid in a claim?

Fire Loss
You pay nothing. The insurer pays the full amount recommended by the loss adjuster

Fire Loss
The insurer pays 75% of the claim amount recommended by the loss adjuster.

Fire Loss
The Insurer pays 50% of the claim amount recommended by the loss adjuster

Flood Loss
You pay a small excess (fixed amount or a percentage of the sum insured)
The insurer pays 75% of the amount recommended by the loss adjuster minus your contribution (the excess)

Flood Loss
You pay a small excess (fixed amount or a percentage of the sum insured)
The insurer pays 75% of the amount recommended by the loss adjuster minus your contribution (the excess)

Flood Loss
You pay a small excess (fixed amount or a percentage of the sum insured)
The insurer pays 50% of the amount recommended by the loss adjuster minus your contribution (the excess)

Earthquake, hurricane & flood that follows
You pay 2% of the Sum Insured
($12,000 in the above example)
Insurer pays the adjusted claim that exceeds your contribution.

Earthquake, hurricane & flood that follows
You pay 2% of the Sum Insured
($9,000 in the above example) 
Insurer pays the adjusted claim that exceeds your contribution.

Earthquake, hurricane & flood that follows
You pay 2% of the Sum Insured
($6,000 in the above example)
Insurer pays the adjusted claim that exceeds your contribution.

If you are not adequately insured, your claim will be reduced in the same proportion as the amount of underinsurance according to the formula:

Loss Paid = C x (S/I) Where “C” is the value of the claim; “S” is the sum insured at the date the contract was issued; and “I” is the insurable value of the property at the date the contract was issued. Please refer to your insurance document for details of all excesses and claims procedure.