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Commercial Property Insurance, Indemnity & Reinstatement, Day one…
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Day one basis of cover
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% uplift 15-50%
The higher the inflation rate and the longer the required rebuilding period, the higher the uplift needs to be.
let’s assume that the uplift offered by a policy is 25% and a claim occurs on day 200 of the policy year. The sum insured will be increased by a figure representing 200/365 x 25% of the sum insured. Thus, in times of high inflation, the sum insured should remain adequate
Principle of Average
provided that the sum insured represents at least 85% of the value at risk, average is not applied.
where underinsurance is estimated to stand at 50%, if the premium paid represents 75% of the premium that the full sum insured would have attracted, the claim will be reduced by 25%.
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