Compensation in insurance is the right of an insurance company to apply to other insurance companies that have similar obligations to the insurer for property insurance with a proposal on the sharing of expenses for compensation for losses arising from insured events [1] [2] . The amount of indemnity is determined in monetary terms and is calculated for each insurance policy issued by various insurers, according to the principle of proportional liability.
The possibility of contribution arises in the presence of five conditions [1] :
- There are two or more insurance policies ;
- Insurance policies must cover the same insurance interests ;
- Policies must cover the same risks that cause loss;
- Policies must relate to the same insurance object ;
- For each insurance policy, each insurer must be liable for loss.
Insurance contracts , according to which insurance policies participating in the indemnity are issued, do not have to be completely identical in terms of interests, risks and objects covered. One policy may "move" onto another. For example, a policy that provides insurance coverage for a product (or other type of property) in one place can make an indemnity in another policy that covers the goods of this policyholder everywhere.
Insurance practice has developed standardized methods for calculating indemnity. In particular, for policies in which the subject of insurance is identical and is not affected by the leverage clause, losses are paid in proportion to the insurance amounts [1] [3] .
For example, in relation to the same insurance object (type of property), three insurance policies were issued by different insurance companies A, B and C for different insurance amounts : 100,000, 150,000 and 250,000, respectively. In this case, each insurance company must pay damage to property in the proportion to which the insurance amount for its policy is in the total insurance amount for all issued policies. The calculation of the insurance indemnity due for damage in the amount of 100,000 is given in the table:
| Insurance Company | Sum insured | The share of the insurance company in the total insurance amount | The amount of reimbursable damage attributable to the company with a total loss of 100,000 to the insured property |
|---|---|---|---|
| BUT | 100,000 | 0.2 | 20000 |
| B | 150,000 | 0.3 | 30000 |
| C | 250000 | 0.5 | 50,000 |
Notes
- ↑ 1 2 3 The principle of indemnity // Insurance: textbook / Ed. T.A. Fedorova. - 3rd ed. - M .: Master, 2009 .-- S. 487-489. - 1006 s. - ISBN 978-5-9776-0032-3 .
- ↑ The principle of indemnity for property insurance . All about insurance. Date of treatment March 8, 2012. Archived June 5, 2012.
- ↑ Contribution for general average // Insurance and risk management: Terminological dictionary / V.V. Tulinov, V.S. Gorin. - Moscow: Nauka, 2000 .-- 565 s. - ISBN 5-02008-388-7 .