What Is a Compensable Factor?

The principle of compensation refers to the principle that when the insured loses, the insured's economic benefits are restored to the original level through the insurer's compensation, and the insured cannot obtain additional benefits due to the loss. The principle of compensation mainly applies to compensatory insurance contracts. The insurance compensation principle can be implemented through cash payment, repair, replacement or replacement.

Compensation principle

The principle of compensation refers to the conclusion of an insurance contract between the policyholder and the insurer.

The principle of compensation is a general principle and cannot be the principle of compensation design alone. If the average monthly salary of an undergraduate graduate is 2,000 yuan in a certain area, a salary below this level will not be enough to attract the average level of talents, and it will also cause a high staff turnover. 2000 yuan should be the average salary of such personnel, but it is not necessary to have a fixed salary. If the performance is higher than the average level, the total salary income should exceed 2,000 yuan. Below the average level, there should be no 2,000 yuan. The arrangement of the salary structure can be diversified, but the actual income should be around 2,000 yuan.

The salary of some enterprises is designed according to their academic qualifications. Enterprise salary becomes social salary, weakening the relationship between salary and work, organization, and team. It will reduce the employee's loyalty and personal performance. Designing compensation based on the compensation principle over a long period of time, companies will attract and retain people with high marks and low abilities, and companies will lose the ability to judge and analyze the suitability of people and work.

Some multinational companies employ the "N-1" principle when recruiting, which refers to job applicants with low social marks in preference under the same test results. For example, two job applicants with a master's degree and an undergraduate degree. If the results of the interview and the test are the same, the undergraduate student is given priority, because under the same salary, the undergraduate student receives high compensation, and the enterprise does not increase wage costs. , Achieved relatively high salaries, loyalty, initiative and sense of belonging are higher than job applicants with high social marks. The social mark is a reference index for the employment of enterprises. The overall knowledge, skills, and abilities of master's students are higher than those of undergraduates, but it does not mean that a specific master's student must be better than undergraduates.

Implications of the principle of compensation for losses

(I) Meaning of insurance compensation principle

The compensation fund refers to the total social products used to compensate the consumption that has been consumed in production.

The application of the compensation principle to the cost-compensation insurance is not unconditional, and it is necessary to give full attention to various problems that may arise in this insurance to ensure that insurance companies and

The insurer will be subject to various factors in the process of fulfilling its liability for loss compensation. These comprehensive considerations include:

(I) Actual losses

It is a basic restriction to make insurance compensation to the actual loss of the insured. That is, when the property of the insured suffers losses, the insurance compensation shall be limited to the actual losses suffered by the insured.

There are several ways to determine actual losses:

1. Determined according to market prices. This is one of the most commonly used methods. When the insured subject suffers losses, the actual loss of the insured subject shall be determined according to the market price of similar products of the same model and the same level of old and new.

2. Determined according to the actual loss cost of the insured. In liability insurance, credit insurance and guarantee insurance, the maximum compensation amount is determined according to the actual loss.

3. Determine according to the cost of restoring the original status of the insurance subject. This method is usually used when the subject-matter insured suffers a partial loss. It is generally believed that the actual expenses incurred to restore the basic of the damaged insurance subject to the form and utility before the damage were the actual losses of the insured.

4. Determined according to the replacement cost less depreciation. When some insured objects suffer losses, if similar products cannot be found on the market and the actual market price of the same products cannot be used to determine the actual losses, they can be determined by deducting the replacement price of the insured objects.

(Two) the amount of insurance

The insured amount is the maximum amount of the insurer's liability for compensation or payment, and the amount of compensation cannot be higher than the insured amount.

(3) Insurance benefits

After an insured accident has caused insured losses, the insured must first have an insurable interest in the damaged subject, and the insurer's compensation amount must be limited to the insured's insured interest in the subject.

(IV) Methods of compensation

Among the insurance compensation methods, there are some compensation methods that have an impact on the amount of compensation for losses, so that the amount of compensation received by the insured is less than the actual loss, or no compensation is obtained at all.

1. Limit liability compensation method. The method of limit compensation means that the insurer only undertakes compensation within the agreed amount of loss, and the insurer shall not be liable for compensation in excess of the loss limit.

2. Limitation of Liability. The exemption limit compensation method means that the insurer is not liable for damages when the loss is within the exemption limit, and the insurer is liable for compensation or payment when the loss exceeds the limit. The exemption limit can be divided into two types: relative exemption limit and absolute exemption limit. Relative exemption limit means that the insurer stipulates a deductible or deductible rate. When the damage to the insured property exceeds the deductible limit, the insurer pays for all losses without any deduction. The absolute deductible limit means that the insurer stipulates a deductible or deductible rate. When the damage to the insured property exceeds the deductible limit, the insurer will only be liable for the excess after deducting the deductible.