What Is Loss of Use Insurance?

Loss insurance refers to insurance that the insured pays insurance premiums to the insurer according to the contract, and the insurer is responsible for the loss of the insured property and its related benefits due to natural disasters or accidents as agreed in the insurance contract. Called "property insurance."

Loss insurance

In the international insurance market, various other insurances that are not covered by life insurance are usually consolidated in

Definition of loss insurance

Also known as "first danger insurance", which means that the insurer's liability or loss is divided into two parts when underwriting: the first part is a loss less than or equal to the insurance amount, also known as the first loss; the second part is a loss greater than the insurance amount , Also called the second loss. The insurer is only liable for the losses of the first part, and the second loss is not covered by the insurance liability, and the insured should be responsible for it. This method of compensation does not take into account the ratio between the amount of insurance and the actual value of the property when calculating the compensation. As long as the loss is within the limit of the insurance amount, the insurer will pay the actual loss amount. Its characteristic is that the compensation amount is equal to the loss amount, but not more than the insurance amount.

The insured is not required to insure the full value of their property, but the maximum amount of loss that can be caused by an insured accident is the insured amount. When there is a loss of property, regardless of the proportion of the insured amount to the value of the entire property, as long as the amount of the loss is within the insured amount, the insurer will be compensated according to the actual loss, rather than by proportional compensation.

Loss insurance principle

The property value is divided into two parts: the first part of the property value is equal to the insurance amount, which is considered to be fully insured, and all losses in the insurance amount should be fully compensated; the second part of the property value is the part that exceeds the insurance amount.