The concept of insurance value is used to regulate the legal relationship between the insurer and the policyholder, individual or legal entity.
Insurance cost determination
The insured value is the amount that determines the size of the premium payment and the total cost of the policy. This is the actual value of a property used for insurance purposes. In order to determine objectively this indicator, resort to insurance assessment. The objects of evaluation may be:
- Separate items of property.
- Vehicle.
- Housing.
- Land.
The result of the assessment is indicated in the insurance agreement by mutual agreement and cannot be disputed by the parties, with the exception of cases of intentional misrepresentation of the company - the service provider by the client. If a fact of falsification of the insured value is revealed, a criminal case may be instituted against the insured.
The insured value and the amount of insurance payments cannot be higher than the actual price of the insurance object.
Insurance Valuation Methods
To accurately determine the insured value, resort to the following valuation methods:
- The actual value of the object at the time of its acquisition is determined. To do this, the policyholder is required to submit documents confirming payment: checks, receipts, sales contract, price list of the dealer company, customs declarations for imported goods.
- To determine the value of the goods is possible according to the catalog of the manufacturer, as well as other reference periodicals.
- When evaluating real estate, an analysis is made of the average market price for similar real estate in this region.
- To assess the value of the object may involve an independent expert.
Concluding an insurance contract
After determining the insured value of the object, an agreement is concluded which indicates:
- Insured value of property.
- The cost of the insurance policy.
- The amount and procedure for payment of contributions, their size.
- The validity period of the contract.
- The amount of payment upon occurrence of an insured event.
The insurance contract shall enter into force on the day after payment of the insurance premium, if payment is made in cash. In case of bank transfer, the document takes effect after the payment of the contribution has been credited to the account of the insurer company.
Insurance policy
The cost of the insurance policy varies depending on the insurance object, the current insurance rates, the selected risk coverage program, the duration of the policy, and the likelihood of an insured event.
Compulsory insurance programs are regulated by special federal laws. For example, the state sets tariffs for compulsory pension insurance, compulsory motor liability insurance programs.
For voluntary insurance, the insurer has the right to establish and regulate insurance rates, as well as the size of insurance premiums.
It is necessary to take into account the cost of the insurance year, that is, the aggregate cost of voluntary insurance policies for 12 months. The conclusion of contracts for a short period will cost more, with a validity period of 12 months it will be possible to save.
Retirement insurance
There is still pension insurance. The insurance value of the year here is the aggregate of all payments to the pension fund that the employer will make for the employee during the year.
When concluding an agreement, it is important to pay attention to the restrictions prescribed in the text:
- The number of payments for the insurance period.
- The list of cases of exceptions in which payment will not be made.
- Violations by the policyholder that may result in denial of service and termination of the contract.
Car insurance value
Auto insurance contracts are especially frequent. For a car, the insured value is a value that is calculated depending on the following indicators:
- Make and year of manufacture of the car.
- Initial cost.
- Mileage.
- Technical condition.
When concluding an agreement on the provision of a service, the car owner must provide a technical passport of the car, certificates of passing inspection, policies for previous periods. To assess the condition, it is necessary to undergo inspection by a specialist of the insurer company. Cars older than ten years are not subject to insurance.
What affects the cost of car insurance?
When determining the cost of a car insurance policy and the amount of insurance coverage, the base rate is used and additional factors are taken into account:
- The age of the driver and his driving experience.
- The territorial coefficient is individual for each region of the country and depends on the frequency of accidents within the territorial entity. The indicator is higher in megacities, lower in rural areas, with a high value the registration of the policy will cost more.
- Seasonality coefficient.
- The bonus coefficient is calculated if the owner of the vehicle draws insurance in the same company for a long period of time. With a constant transition from one company to another, the malus coefficient will be calculated, and the cost of the policy will increase.
- The factor of an accident due to the fault of the driver: if in previous insurance periods the driver fell into emergency situations due to his own fault, registration will cost more.
- The engine power factor is calculated by the number of horsepower prescribed in the technical data sheet of the car.
- The limiting coefficient varies depending on how many people drive the vehicle.
When applying for a CASCO policy, it is additionally taken into account whether the vehicle is under warranty service at a dealer store or if the warranty period has expired, repair prices and accessories. It must be remembered that when compiling a hull insurance, many firms take into account which anti-theft alarm system is installed on the car, and the price of the service will vary depending on the degree of reliability of the anti-theft system.
Cost of insurance premium
The amount that the client pays to the insurer to pay the insurance service is called the premium. For the premium, the insured value is a value that is calculated on the basis of the cost of the policy and can be paid both once and monthly throughout the entire insurance period. It is possible to pay an insurance premium for cash, as well as for bank transfer.
When the insurance premium is paid monthly, its sizes are calculated at the tariff rate:
- The net rate is determined by the probability of an insured event.
- The gross rate includes the correction factor, as well as the load, that is, the insurer's expenses for the provision of services, unforeseen expenses not related to the formation of the insurance fund.
The net rate goes to the formation of the insurance fund, from which, upon the occurrence of an insured event, the policyholder will be paid.
Insurance payment
On payment, the insured value is the amount of money that is paid to the insured person upon the occurrence of an insured event. As a rule, it represents a certain percentage of the insured value of the property. The indicator depends on the cost of the policy, coverage program and tariff rate and insurance risks prescribed in the contract. The size of the insurance payment varies depending on the size of the damage caused to the property, taking into account depreciation depreciation. The procedure and amount of payments is specified in the contract. To assign a payment, the policyholder is required to submit documents fixing the occurrence of the insured event.
The insurer is obliged to accept the documents for consideration and, after a period of 30 calendar days, make a decision on the purpose of the payment.
The insurer company has the right to refuse payments in the following cases:
- If the insured event occurs due to unlawful actions of the insured person.
- The policyholder did not provide the necessary documentation for the insured event within the time prescribed in the contract.
- The policyholder intentionally caused damage to property in order to receive payment.
- Insurance payments are not made if the insured property is subject to seizure or confiscation by decision of the competent authorities.
If the damage received requires immediate repair, the policyholder has the right to file an application for advance payment of the deadline previously established by law. The preliminary insurance payment is entered by the company into the individual customer card. If at the end of the review period it becomes clear that the damage is not refundable, the policyholder is obligated to return the amount previously paid.