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Physical persons’ property insurance.
According to the terms of property insurance contract the following kinds of property can be insured:
- household property;
- buildings of different character (living, countryside) which are constantly located and consist of foundation, walls and roof;
- dwelling fund – flats and rooms in condominiums owned by an insurer;
- personal property – clothes, shoes, portable audio and video devices, musical instruments and other home utensils.
Physical person’s property can be insured against:
- illegal actions of the third parties.
Insurance contract can be concluded against all risks or particular risk only (it’s up to the insurer). If the insurer is insured against particular risks, he will have no compensation for other risks.
Items of property which can’t be insured, are the following:
- property in officially claimed area of natural disaster;
- unsafe property to be pulled down, property that requires general reconstruction and property that is more than 60% worned out;
- property in subsidiary spaces for communal use;
- home and decorative plants, domestic animals and birds;
- money and securities, documents, manuscripts, precious metals ingot;
- equipment, machine-tools and other items of property, used in producing goods;
- property bought or produced for the subsequent selling;
- agricultural, viticulture and live-stock-breeding production;
- means of transport;
- shops and other industrial areas.
The compensation will not be paid in case of:
- military operation and civil riots;
- nuclear accident;
- bad intention or negligence from the insurer or insurant;
- collapse of buildings and their parts;
- stealing of property in time of insurance case or immediately after it;
- non-observance of instructions on keeping the insured property, if it was used for improper purpose.
Property can be considered insured if it is located in the place, stipulated in the Insurance Policy (except personal property). In case of moving to another place the insurance contract remains in force if the underwriter was informed in advance.
The insurance sum is defined within the framework of real value of property. This value is defined, taking into consideration its price at the given date and deducting depreciation.
The insurance sum should not be changed in case of inflation and price growing.
Juridical persons’ property insurance.
This type of insurance can be applied to juridical persons property, which can be damaged as a result of the insurance case.
According to the insurance contract, the juridical person can be insured against
- natural disaster;
- malicious mischief from the third persons;
- explosion of steam-boilers, gas-pipers, machines and similar devices;
- damage of the insured property by water from sewage, heating and firefighting system;
- breaking of windows, mirrors and shop-windows.
The damage will not be compensated, if it is resulted from:
- military operations, civil riots;
- if the property was damaged in accordance with civil and military authorities’ decisions;
- nuclear accidents;
- the insurer’s bad intention or negligence;
- spontaneous combustion, fermentation, decay and other natural processes in the insured property;
- collapse of buildings and their parts, unless this collapse is caused by the insurance case;
- property’s theft in time of the insurance case or immediately after it.
Property can be considered insured if it is owned by the insurer, bought by the insurer on credit and served as a collateral for this credit.
Items of property, that can’t be insured, are the following:
- cash in the form of national and foreign currency;
- stocks, bonds and other securities;
- manuscripts, drafts, designs and other documents, books in accountancy;
- models, patterns, samples and so on;
- precious metals ingot and precious stones without mounting;
- information keeping devices in computer systems and the like;
- stamps, coins, pictures, sculptures and other works of art;
- explosive substances;
- goods in stock and taken on commission;
- means of transport;
- objects, which are in the insured space, but not owned by the policyholder.
A special contract, including inventory, can be concluded in respect of these items. The basis for measuring insurance sum is a real value of the insured property at the moment of concluding the contract (taking into consideration its depreciation).
A real value is defined:
- for equipment, machine-tools by a real price on similar objects;
- for buildings by a real price on a similar building in a given locality;
- for products, manufactured by the policyholder by a real cost;
- for different things of value, bought by the insurer by a real price (including overheads).
Any movable property is considered insured in areas, stated by the contract.
The conclusion of insurance contract.
The insurance contract is concluded on the basis of the formal letter from the insurer. The insurance contract is confirmed by the Insurance Policy.
Premiums can be paid in a lump sum or at agreed dates. Insurance contract comes into force after the first premium is paid, but not before the date, stipulated by the contract.
The underwriter’s responsibilities:
- to make the insurer aware of general terms;
- to pay compensation in the insurance case;
- to pay compensation in advance (if the amount of compensation is clear and investigations are not completed within 3 months period);
- to compensate the expenses, caused by preventing damage;
- to keep in secret all kinds of information obtained in the process of insurance.
The insurer’s responsibility:
- at the moment of concluding the contract to inform the underwriter about all circumstances, influencing the insurance risk;
- to inform the underwriter about other insurance contracts on the object;
- to pay premiums in due time;
- to keep official and agreed rules of security;
- if insurance case takes place, the insurer should inform about the possible steps in order to prevent the insurance case or to reduce the damage;
- to keep the damaged property as it is.
The underwriter’s responsibilities are cancelled if:
- period of contract is expired;
- compensation is paid completely;
- the contract is not valid.
If the compensation is paid partly, the contract remains in force, but the present compensation could be the difference between total insurance sum and the compensation already paid. If the contract is concluded for more than 1 year and some compensation is paid during this year, it remains in force for the total sum.
The measuring of damage and compensation.
Compensation is paid:
The insured object is considered damaged, if restoring expenses and remaining cost do not exceed the real cost of the insured object (at the moment of insurance case).
Compensation includes the insurer’s expenses on saving the insured property and reducing the damage.
In all cases compensation, including expenses on reducing the damage and restoring the damaged property, should not exceed the insurance sum.
The underwriter, who paid compensation, has the right to claim the sum from the third party, responsible for caused damage.
If the insurer has already received the compensation from the third party, the insurance company should only pay the difference between the sum stated in the insurance contract and the sum received.