Double insurance and its implications

In insurance practice, there are cases of repeated non-insurance occurs when insured the same interest against the same danger, during the same time, several insurance companies. Repeated insurance is not prohibited by law, but sometimes it generates a double insurance, which is prohibited by law.

Dual insurance occurs in cases where

- The object of insurance is insured against the same risk;

- The object is insured for the same insurance period;

- The object insured in several insurance companies;

- The sums insured together more than the insured value.

To avoid double payment in the rules of insurance indicated that the policyholder is obliged to provide information to the insurer of all insurance contracts entered into in respect of the insured property.

Double insurance can be appealed in court. If the double insurance emerged without malice, doing the following:

1. double insurance was found to insured, the insurer may require a reduction of the sum insured of the second contract, and thereby reducing insurance payments. Dual coverage may also arise if the insured value begins to fall.

2. The fact that double insurance becomes known after the accident, while insurers are obliged to pay indemnity insurer, the total amount of which shall not exceed the amount of damage, but each insurance company is liable for the amount of insurance, which he should pay under the contract.

The client usually receives compensation from an insurance company, and the remaining insurers divide the damage between them and reimburse the payor-insurer of the relevant part of the overpayment in this case uses the concept of indemnity. Contribution – this is the right insurance company to contact the other insurance company, which is likewise responsible to the insurer, with a proposal to divide the honey is the cost of damages.

Contribution is calculated for each insurance policy on the principle of proportionality. The possibility of indemnity arises when there are 5 conditions:

1. the existence of two or more policies;

2. insurance policies should cover the same insurable interest;

3. should cover the common dangers that cause loss;

4. policies must relate to one object of insurance;

5. each policy should be responsible for the loss.

In insurance practice, there are standard calculations of indemnity, in particular for policies on property insurance losses are paid in proportion to the sums insured.

To fall under the policy contract Averige, the method of independent responsibility. For an individual insurer’s independent liability is defined as the amount he would have to pay if it was the only insurer covering damages. If the amount is higher than the independent responsibility to be paid part of the loss, it is divided proportionally.