If the object is only partly damaged the insurer will have to pay the insured

If the object is only partly damaged the insurer will

This preview shows page 29 - 31 out of 100 pages.

If the object is only partly damaged the insurer will have to pay the insured an amount equal to the cost of repairing the insured object, or the insurer may choose to repair the damaged object himself or herself. If, however, the object insured is totally destroyed, the insurer will have to compensate the insured for his or her loss, which will be an amount equal to the value of the insured object at the time of the destruction. 3.2.2.1 Valued and unvalued policies It can be very difficult to determine the value of an insured object. The insurer and the insured may agree on the value of the insured object at the time of conclusion of the contract. This type of policy is called a ``valued policy''. 3.2.2.2 The insurer's right to repair The insurer normally reserves the right to have the damaged object repaired instead of compensating the insured. 3.2.2.3 The insurer's right of subrogation The principle of subrogation is best explained by means of an example: You insure your car against damage with an insurance company. One Sunday afternoon you go for a drive. Another driver negligently ignores a stop sign and bumps into your car. On Monday morning you phone your insurance company and they immediately have your car repaired. The repairs do not cost you a cent. The total repair bill costs your insurance company R10 000. Your insurance company would now like to recover this 23
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cost from the negligent driver. Because the insurance company has made good your damage, they will be able to institute action in your name against the negligent driver in order to recover the repair cost. It is important to take note of the following: & The insurer's right of subrogation rests on contract ± in other words, the insurer and the insured contractually agree that the insurer will have a right to institute an action in the insured's name. & This right may be exercised only if the insurer has fully compensated the insured for the damage. 3.2.2.4 Insuring with several insurers You have the right to insure an object with as many insurance companies as you wish. ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ Activity Your car is valued at a total amount of R10 000. You insure your carwith Shallow Insurers for R10 000 and with Lekker Versekeraars forR10 000. Your car is damaged and the cost of repairs amounts toR10 000. How much can you claim in damages from either Shallow Insurers orLekker Versekeraars?
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