Policy Insurance

6. REINSTATEMENT CLAUSE

• The insurer has the option to discharge his liability by reinstating or replacing the
damaged property.
• The clause removes the dispute between the insured and the insurer because the insurer
can replace the goods by similar ones without submitting to the stated value given to
them by the insured.

7. INSURER’S RIGHTS AFTER A FIRE

On the happening of any loss or damage to any of the property insured by this policy, the
company may :
a) Enter, take and keep possession of the building or premises where the loss or damage
has happened .
b) Take possession of any property of the insured in the building or on the premises at
the time of the loss or damage.
c) Keep possession of any such property and examine, sort, arrange, remove or
otherwise deal with the same.
d) Sell any such property or dispose of the same for account of whom it may concern.
8. SUBROGATION
• It makes clear that the insured is precluded from obtaining more the actual loss.
• The insured cannot recover from the third party as well as from the insurer more than the actual loss.

9.WARRANTIES
• According to the clause the warranties of the previous policies or policy may not essentially be applied
to renewed policies.

10. ARBITRATION

• This clause is meant to avoid undue litigation and settle the dispute by Arbitration. It is a
very simple, cheap and swift method of settling disputes.

11.PURCHASER’S INTEREST CLAUSE

• The above clause is useful to the vendor and purchaser up to the date of completion of
the sale for their respective interests.
• If the purchaser elects to continue the insurance in his own name, in that case the
purchase price will include the value of the unexpired insurance.

12.LOSS PROCEDURE

• It is the responsibility of the insured to inform about the loss as soon as the loss
occurs.
• The insurer will send a claim form to the insured asking for a detailed description
about the
a) Loss
b) The place
c) Circumstances under which it occurred
d) Description of the property
• The insurer will examine the claim form and if find it reasonable, claim is paid at
once.

13.CONTRIBUTION AND AVERAGE

• The Contribution clause clarifies that if there is more than one insurance, all the insurers
will indemnify according to their proportions to the total insurance.
• One alternative is also available that the insured can recover the whole of the loss from
any one insurer leaving him to collect the proper contributions from the other insurers.
• The Contribution clause simplifies the claim settlement.

• The Average clause reveals that the loss will be paid in proportion to the insured amount
and total amount of property.