Insurable Risk?

CantGetNoSleep

I'm looking for where I can find in Irish law the concept of insurable risk? For example if my house was valued at 100k, but insured for 200k, I would get 100k on my insurance. Likewise if it was insured for 50k I would only get the 50k.

I'm just wondering where this is set out in law? To me it is just a basic concept of insurance.

Likewise, does the insurance company have any obligation to inform me of this? I know for life assurance the Insurance Act, 2000 states that they must provide certain information in relation increases in premium etc.

kkelliher

CantGetNoSleep wrote: »

I'm looking for where I can find in Irish law the concept of insurable risk? For example if my house was valued at 100k, but insured for 200k, I would get 100k on my insurance. Likewise if it was insured for 50k I would only get the 50k.

I'm just wondering where this is set out in law? To me it is just a basic concept of insurance.

Likewise, does the insurance company have any obligation to inform me of this? I know for life assurance the Insurance Act, 2000 states that they must provide certain information in relation increases in premium etc.

Your house value has nothing to do with insurance. The cost of rebuilding your property is what you insure not the value of your property. this does not need to be set out in law as it is a simple principal. If it costs €100,000 to rebuildyour home thats what your insurance cover should be. If you insure it for €200,000 your overinsured and your wasting money,if you insure it for €50,000 your underinsured and are only insuring 50% of the risk.

when it comes to home insurance the cost of rebuilding your property and the value you insure is down to you. There are people and companies who decide to underinsure as they are happy to take some of the risk for a lower premium. Insurance company has no obligation in respect to the level of household cover you incept.

CantGetNoSleep

Ok thanks I understand that, but i can't find it in any law?

kkelliher

CantGetNoSleep wrote: »

Ok thanks I understand that, but i can't find it in any law?

what is there to find? Why would it be in law?

seb65

CantGetNoSleep wrote: »

I'm looking for where I can find in Irish law the concept of insurable risk? For example if my house was valued at 100k, but insured for 200k, I would get 100k on my insurance. Likewise if it was insured for 50k I would only get the 50k.

I'm just wondering where this is set out in law? To me it is just a basic concept of insurance.

Likewise, does the insurance company have any obligation to inform me of this? I know for life assurance the Insurance Act, 2000 states that they must provide certain information in relation increases in premium etc.

If you only insured it for 50K and it was worth 100K, you have only insured 50% of the risk. You would only get 25K from the insurance company.

Peregrinus

seb65 wrote: »

If you only insured it for 50K and it was worth 100K, you have only insured 50% of the risk. You would only get 25K from the insurance company.

But the risk is 100k, and 50% of 100k is 50k, not 25k. So if the insured property is a total loss, the payout will be 50k.

seb65

Peregrinus wrote: »

But the risk is 100k, and 50% of 100k is 50k, not 25k. So if the insured property is a total loss, the payout will be 50k.

Actuaries work out the premium and afford a very small percentage of possibility for a total loss. If you underestimate the total loss, you skew the risk and an accurate premium cannot be calculated. Your insurance will hold you as a 50% co-pay on a loss that is undervalued by 50%.

Peregrinus

seb65 wrote: »

Actuaries work out the premium and afford a very small percentage of possibility for a total loss. If you underestimate the total loss, you skew the risk and an accurate premium cannot be calculated. Your insurance will hold you as a 50% co-pay on a loss that is undervalued by 50%.

Yes, I know. So if, when the loss actually occurs, it is 100k, then you will get 50k from the insurer, not 25k.

If the property is partly damaged and reinstatement cost is, say, 40k then you will get 20k from the insurer.

seb65

Peregrinus wrote: »

Yes, I know. So if, when the loss actually occurs, it is 100k, then you will get 50k from the insurer, not 25k.

If the property is partly damaged and reinstatement cost is, say, 40k then you will get 20k from the insurer.

No, because by only insuring 50K of a 100K risk you are actually only insuring 50% of the stated risk - 50% of 50,0000. For a better explanation than mine, look up "condition of average" on wikipedia.