What is Underinsured?

Under-insured means that the amount of insurance agreed in the insurance contract is lower than the value of insurance.

Under-insured

Right!

Under-insured means

Under-insured means

The so-called "under-insurance" means that the amount of insurance agreed in the insurance contract is lower than the value of insurance. For example: For an ordinary Santana new car with a value of about 120,000 yuan, you only buy 80,000 yuan of insurance, which is insufficient insurance. So, how to pay for the underinsurance? According to the insurance clause: "For vehicles whose insurance amount is lower than the purchase price of the new car, the compensation and repair and rescue costs are calculated according to the ratio of the insurance amount to the purchase price of the new car." Therefore, according to the insurance regulations, Mr. Li can only get a part of the repair compensation, Its insurance compensation formula is 9550 × (40/80) = 4775 yuan. From this point of view, the consequence of underinsurance is often that after an insured accident occurs, the insurance company only assumes compensation liability in proportion to the amount of insurance and the value of insurance, that is, proportional compensation.

In addition, the owner should also know that the compensation for car damage insurance is limited to the amount insured. If the insured vehicle is compensated for the total loss or part of the loss at one time, the insurance contract is terminated. The reason for this is because the basic principle of insurance is financial compensation, that is, the insured cannot obtain additional benefits through insurance compensation. For under-insurance, it can be seen that the insured has only partially transferred the risks, and it can also be seen as the insured and the insurance company co-insured. Therefore, after an insured accident occurs, the loss shall be apportioned between the policyholder and the insurance company.

Here, auto insurance experts remind car owners: they should try their best to maintain sufficient insurance when applying for auto insurance. While insuring the main insurance, select appropriate additional insurance as needed, and determine the corresponding insurance amount according to the actual value of the property.