Q:Non-marine Q&A

1. What is an under insured contract?

The insured amount is lower than the actual insured value. And under such contract, the insurer is only liable to indemnify upto the agreed insured amount, and has no liability to the losses incurred above such insured amount.

2. What is statutory insurance?

Also called forced insurance. In accordance with the relevant law and regulation of the country, other groups or industries must place insurance regardless of their willingness.( for example, the statutory third-party’s liability insurance attached on a motor policy practiced in China )

3. What is Disability Income insurance?

Also called loss of income insurance, income security insurance. Subject to loss of working ability due to agreed diseases or accidental injuries, the insurer will compensate the assured so that to make up decrease or loss of income for a certain period of time. Disability Income insurance is also a healthy insurance, which has a history existing over 100 years in foreign countries.

Disability income insurance can be slipt into two kinds, one is compensating loss of income caused by injury, the other one is compensating loss of income caused by disease.

4. What is co-insurance?

It means two or more than two insurers covering the same risks, accident of the same subject, and the insured amount does not exceed the actual insured value of the subject.

Co-insurance is a direct insurance, therefore when co-insurers covers the insurance liabilities together, they can arrange reinsurance if needed, and establish a reinsurance relationship with reinsurers.

5. What is residual value?

It is the commercial value that can still be used after the insured property suffers damage.

In accordance with Insurance Law: If the residual value was given to the assured by agreement, the insurer should deduct the amount when compensating. Of course the residual value can be given to the insurer, under such circumstance, they should not deduct the amount when compensating.

6. What is replacement value?

Replacement value means replace the value of the same brand or similar model, size, property of a new product (including producer price, freight rate, insurance premium, tax fees, potential tariff and installation fees). Simply speaking it is the value to purchase the same product again. Replacement value can be used when placing property insurance for houses and machineries in certain fixed values.