Page 76 - Ebook IC S01

Survey And Loss Assessment IC-S01

associated with processing small claims because their costs could easily exceed

the actual amount of the claim.

For ex. A policy has a sum insured for Rs.1 lac. It contains a franchise clause that

no claim would be payable if the claim amount is less than Rs.500. This means if

there is a claim of Rs.450 no claim would be payable and say if there is any claim

of Rs.5000 full amount will be payable. This has been done to eliminate small

claims which will not be feasible to pay for insurance company.

Deductible Clause

A provision in an insurance contract stipulating that the insurer will pay only that

amount that is in excess of a specified amount.

For Eg A policy has a sum insured for Rs.1 lac. It contains a deductible clause that

every claim would be payable over and above an amount of Rs.10,000. This

means upto 10000 no claim would be paid. Now say loss under a policy is

Rs.25000. The insurance company will pay only Rs.15000 and deduct Rs.10000

from every claim.

Endorsement

An amendment or addition to an insurance policy, to cover special

terms/conditions.

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