Page 223 - Fire Insurance Ebook IC 57

The Insurance Times

Any claims arising can be considered by the insurance
company after deducting the premium amount on ex-
gratia basis. Whenever ex-gratia payments are made,
they are not paid out fully and paid 'without precedent',
i.e such claims cannot place an insurer under an
obligation to meet similar claims in similar circumstances
in future. Ex-gratia payments are justifiable as they
mitigate the insured in crisis. Also there is legal sanction
for such payments by insurers in their course of
business.

Since the claims are outside the scope of the policy, and
the paymentsare madewithoutadmission of legal liability,
subrogation rights do not occur. Reinsurance
arrangements usually follow the action of the ceding
Company. Where coinsurance is involved, the leading
office consults the coinsurers before deciding on the ex
gratia payments.

e. Without prejudice - Claims correspondence of the
insurers with the insured are marked 'without prejudice'.
These words have the effect of leaving the ultimate

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