When concluding an insurance contract, the company's customers in most cases have a desire to pay less insurance payments. However, upon the occurrence of an insurance event, policyholders have to pay for savings when choosing a program and basic insurance conditions. One of the most important concepts is the insured amount. Aggregate or non-aggregate - how to figure it out in order to be sure of full compensation for losses incurred?
Actual value of the insurance object
In order to insure a property, its price should be determined. This indicator is the main one for the subsequent calculation of insurance premiums and determination of the insurance amount. In order to determine the actual value of the property, use the following methods:
- determination of the price of a new facility using the percentage of depreciation;
- invoice, document of sale with indication of cost;
- market price based on data from specialized companies;
- assessment by independent experts.
Sum insured
Each insurance contract indicates the value of the property, or level of liability. In such documents, this concept is called the insured amount. It may be equal to the real or contractual value of the property, as well as be determined by legislative acts. When life and health insurance is impossible to name the price, so the client himself chooses the level of responsibility of the profile company. Based on their insurance amount, upon the occurrence of an insurance event, the insurer calculates insurance compensation. There are different options for calculating it. For this purpose, the concepts of aggregate or non-aggregate insurance amount are prescribed in the contracts. This allows the policyholder to decide on the insurance coverage program and, possibly, save on insurance payment.
Aggregate insurance liability
Another name is the reduced insurance amount. The contract stipulates that the policyholder agrees to the use of the aggregate insurance amount. In this case, the amount of liability of the insurance company consists of the sum insured in the contract. Upon the occurrence of an event in which the client is entitled to compensation for losses incurred, the insurer pays it in full. However, the real insurance amount under the contract is reduced by the amount of covered losses. And when the next insured event occurs, when calculating losses, the profile organization will proceed from the already reduced insurance amount.
What does a non-aggregate insurance amount mean?
This concept in some contracts is called the irreducible amount. The insurance document or its annexes states that one of the conditions is the use of a non-aggregate insurance amount. This means that in the event of an accident or accident, payment will be made based on the insurance amount specified in the contract. Moreover, if one or more insurance events occur, in which the company will have to compensate for the losses incurred, the amount of liability will remain in its original size.
In addition to the breakdown of the sum insured into aggregate and non-aggregate under Casco or other agreements, insurance companies use indexation or depreciation factors when calculating losses.
Variable amount of liability
The concept of indexation is used when signing an insurance contract with a non-aggregate insurance amount.This means that if an insured event occurred during the period of the policy, the payment of compensation will be based on the amount of the contract and the depreciation period of the object at the date of the accident. To do this, there is a developed table by month. The use of the coefficient for an indexable non-aggregate insurance amount takes into account the actual depreciation of the insured property at the time of the accident or unforeseen event, as a result of which damage was caused. It should be noted that an incomplete month is taken as the actual month of operation.
Non-Indexable Insurance Liability
After reviewing the terms of insurance, the client of the company can choose a non-indexable non-aggregate insurance amount. This means that when calculating the amount of compensation for losses incurred, the amount of liability will remain at the level indicated in the insurance document. Regardless of the number of events and the date of their occurrence, the insured amount will always be unchanged.
Insurance claim calculation
If the event falls under the terms of the contract and meets all the signs of the insurance, with an indexable non-aggregate insurance amount, the calculation is based on the specified amount in the insurance policy using the indexation coefficient at the time of the accident. If the franchise is specified in the contract (conditional or unconditional), then the amount of compensation is also adjusted for its size. If the non-aggregate amount under the contract is defined as non-indexable, the amount of depreciation is not taken into account.
If an indexable aggregate insurance amount is established under the contract, then when determining the amount of compensation, not only the indexation coefficient and deductible are taken into account, but also the payments that were made earlier under this agreement are deducted.
Advantages and disadvantages of the aggregate insurance amount
The most important advantage of reduced insurance liability is that upon conclusion of an agreement with such conditions the insurance premium is always reduced in comparison with another type of security. Policies with this insurance amount may be suitable, for example, for experienced drivers who, according to statistics, rarely get into accidents.
The main drawback of the aggregate insurance amount is that with each insurance event, the calculation of compensation for the damage incurred will be made from the reduced amount. This type of liability is offered by insurance companies for voluntary vehicle insurance.
Advantages and disadvantages of a non-aggregate insurance amount
There are types of insurance where the application of irreplaceable insurance liability is provided not only by the rules of the insurer. So, for compulsory insurance of a motor citizen, only a non-aggregate insurance amount is applied. This is spelled out in applicable laws.
For other types of insurance, the choice of liability depends on the wishes of the insured. A contract with a non-aggregate insurance amount is ten to fifty percent more expensive than with aggregate liability. At the same time, it should be remembered that when paying compensation, regardless of the number of insurance events, the calculation will be made from the original insurance amount.
When studying the conditions, special attention should be paid to calculations using indexation coefficients of a non-aggregate insurance amount. This will allow you to be prepared for possible reductions in compensation payments, provided that such nuances are taken into account when signing the contract. It is especially important that owners of vehicles that have been in operation for several years, therefore, have significant wear and tear.
Prior to signing the insurance contract, it will be right to consult with the company manager about such subtle features of the agreement so as not to be disappointed when insurance events occur.Indeed, sometimes a small amount of increased insurance payment is a significant amount of compensation for damage received.