RESTRICTIONS ON THE AMOUNT OF INDEMNITY
Insurance companies set a number of restrictions upon the number of their responsibilities. Restrictions apply in the loss is (1) the amount of interest that can be insured, (2) the actual cash value of the loss of it, (3) the limits of the policy, (4) other insurance, (5) articles co.-insurance, contribution and average, and (6) reduction-reduction (deductibles). Of course not all this restriction contained in any policy.
Limitation of the amount billed by parties are covered, it is always less than the limit that can be charged in any losses. Although the actual cash value of the loss of it and face value of the policy is the limit or the limit of the generally valid, but in particular the loss of one of these can limit is the lowest and therefore determine the amount of the indemnity will be paid.
THE MAGNITUDE OF THE INTERESTS THAT CAN T BE INSURED
In General, the replacement of the maximum losses were limited by the interests of the parties to the paid. For example, standard fire insurance policies in New York, declared that the insurance company will not pay under the circumstances, however, are higher than the interests of the parties (interest) bear. Example say Fred Dugal has half of a building worth Rp 250,000,000.00. He is insuring that building Rp 250 million over his own name in case of total loss then Fred Dugal is only entitled to charge Rp 125 million-i.e. the amount of losses that the amount of any drawbacks, despite the fact the nominal value of the policy and the value of the destroyed building that it is USD 250 million. Restrictions according to the interests that can be insured it prevents someone charge me more than the disadvantage so that negate the element of gambling (gambling) and reduce the danger of morals and morale.
Insurance policy is a contract of indemnity (indemnity), and
replacement that exceeds the loss suffered must be contrary to the
principle of indemnity.
ACTUAL CASH VALUE
Property insurance contracts typically limit the indemnity to the amount of actual cash value of the loss of it. Standard fire insurance policies New York 1943, for example, stated in the agreement assured him that he bore "arrived of the cash value of the treasure at the time of occurrence of losses". He will not pay more than "the cost of repair or replace the treasure with the same type of material and its quality in a decent period of time after the loss".
The type and quality of the same kind and quality does not mean that exactly, because there are times when it is not only impractical to reproduce the property (building and equipment) that uses materials and method of construction is the same but it is also not possible. Therefore, the parties to the paid and the insurer accepts the concept of replacement cost and not the cost of reproduction. However, the cost of replacement (replacement cost) must be in the same style, quality and functionality with the property destroyed or damaged it.
FACE VALUE OF THE POLICY OR POLICY LIMITS
If not in other States, then a property insurance contract will not pay more than the face value of the policy or the limits of his policy.
Although most policy has limits of nominal value, but there are also do not specify something limit. Car insurance policy for example, generally renders the actual cash value. He promised to pay the actual cash value of the loss that, regardless of the magnitude. A contract can contain not only limits the losses but also some limit against kind of treasure, harm, location, disaster or hazard.
OTHER INSURANCE
How to determine the magnitude of the indemnity if it consists of more than one insurance policy or the stuff in insure it? This loss on the handle with the road entering the article called the "other insurance" clause into the insurance contract it.
Other Types Of Insurance Article
These other insurance clause can contain that closure of this insurance are borne along with other insurance companies, or he can prohibit the other insurance of the same interest. Closing this section both together can declare policies that would "bear the same great", or mention that one will pay first. The type of the first article called "contributing", and the second one "primary" or "excess".
The reasons for the restriction of other insurance.
If a dependent is allowed to charge the full amount of the loss of several insurance companies, naturally he will earn huge profits after the occurrence of something. This certainly goes against the wisdom of the State (public policy), because it not only violates the principle of indemnity (indemnity) but will also give rise to moral hazard. He actually will be able to become a transaction losses. The Court will not allow the replacement of the double in the insurance policy, although it does not contain articles "other insurance".
