Underinsurance

Claims amount get reduced proportionately In relation to Sum Insured/ Value at Risk

Properties or machineries should be insured for market value or replacement value to be considered as on the date of loss (Not on the date of insurance) to avoid average clause

Adequate Sum Insured to be taken after Valuation

In a manufacturing plant short circuiting in a heavy machine due to which the claim was denied by the Insurance company

Asset in which the short circuiting has originated is not covered as per the domina clause provision under policy terms and conditions.

Exact smaller part from which the shortcircuiting had occurred was identified. This resulted in the increase in the claim amount because the cost of the smaller part was only disallowed.

Critical machines to be covered under both Fire and Machinery Break Down Policy so that this exclusion is not applicable and there is a resultant increase in the claim amount.