What Is Excess Insurance?

Excess insurance refers to insurance with an insurance amount greater than the insurance value. The occurrence of over-insurance, or the insurance amount insured by the parties due to good faith or malicious intent, is higher than the insurance value, or the value of the insured object has fallen after the conclusion of the contract, causing the insurance amount to exceed the insurance value. About the legal consequences of excess insurance Article 55, paragraph 3 of the Insurance Law states: "The insurance amount must not exceed the insurance value. If the insurance value exceeds the insurance value, the excess is invalid, and the insurer shall refund the corresponding insurance premium."

Excess insurance

Right!

Excess insurance refers to insurance with an insurance amount greater than the insurance value. The occurrence of over-insurance, or the insurance amount insured by the parties due to good faith or malicious intent, is higher than the insurance value, or the value of the insured object has fallen after the conclusion of the contract, causing the insurance amount to exceed the insurance value. About the legal consequences of excess insurance Article 55, paragraph 3 of the Insurance Law states: "The insurance amount must not exceed the insurance value. If the insurance value exceeds the insurance value, the excess is invalid, and the insurer shall refund the corresponding insurance premium."

In the event that the insured person over-estimates the value of the property due to good faith and causes over-insurance, the insured person may reduce the insurance amount and insurance premium in proportion to the actual value of the subject-matter insured, and change the contract. When the insured is maliciously fraudulent, in order to obtain more compensation after the insured accident, and deliberately overreports the value of the property for excessive insurance, the insurer has the right to terminate the contract and enjoy the right to claim compensation for the losses caused thereby.

Causes of excess insurance:

One: When the insurance contract is concluded, the insurance amount determined by both parties to the insurance exceeds the insurance value. This kind of excess insurance has goodwill and malicious intent. If the former requires the insurer to have a poor understanding of the actual value of the subject matter of the insurance, it may be mistaken for high insurance. ; The latter, in order to protect people's deliberate speculation, in an attempt to obtain improper benefits.

2: During the duration of the insurance contract, the value of the subject matter of the insurance drops, so that the insurance premium exceeds the insurance value when the insurer performs the compensation. When there is no loss of the subject-matter insured, the insurer only compensates according to the actual value of the subject-matter in addition to the insured or the insured's fraudulent behavior and invalidating the insurance contract.

The significance of distinguishing between full insurance and excess insurance is that the insurance amount must not exceed

The phenomenon of over-insurance, according to the classification of insurance, is only applicable to the active insurance of loss insurance. As for the negative insurance, although it is also used to fill specific losses, the value of the underlying insurancethe negative insurance benefitis only in the case of damage. It only appeared when it happened, and before that, there was no possibility that the insurance amount exceeded the insurance value.

Jurisprudence, based on whether the parties are malicious or fraudulent in the generation of excess insurance, they are divided into goodwill and malicious excess insurance. Well-intentioned excess insurance generally appears in variable value insurance. Either the insured or the insured has overestimated the value of the property out of good faith, or due to the decline in the value of the insurance market, the insurance amount exceeds the insured value when the subject matter of the insurance is released. Regarding over-insurance in good faith, the insurance laws of various countries have stipulated that the insurance premium can be reduced correspondingly according to the value of the subject matter of the insurance. Malicious over-insurance refers to the occurrence of over-insurance due to the parties' fraud. In this regard, the insurer has the right to terminate the contract or request compensation for losses or non-refundable insurance premiums paid by the insured. There are also national laws stipulating that, regardless of whether the excess insurance is due to good faith or bad faith, the excess of the insurance contract is invalid. Article 40, paragraph 2 of the "Insurance Law" stipulates: "The insurance amount must not exceed the insured value; if it exceeds the insured value, the excess will be invalid." It can be seen that China's insurance law has relatively rough provisions on the consequences of excess insurance and fails to distinguish between goodwill and Maliciousness shall always be considered invalid.