Re: Deduction of Average clause

[sabrhas...@gmail.com]

Dear All

When the average is applicable, salvage shall be deducted proportionately with the same percentage as of average.
Salvage value is for the value at risk and not for Sum Insured.

Kind regards

Rafiq Ahmad Shah
Srinagar

Sent from my BlackBerry® smartphone provided by mobily

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From: BV Kumara Swamy <bvk...@gmail.com>

Sender: insurance-su...@googlegroups.com

Date: Tue, 3 Sep 2013 05:44:52 -0700 (PDT)

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Cc: insurance...@googlegroups.com<insurance...@googlegroups.com>; rohila praveen<rohil...@yahoo.co.in>

Subject: Re: Deduction of Average clause

While assessing the loss you always remember the word SAFE. i.e. S for Salvage, A for Agerage clause, FE for Franchise Excess.

Net liability :  LOSS - Depreciation if any - SAFE. i.e. Salvage-Average clause-Franchise Excess.

B.V. KUMARA SWAMY.
CHITRADURGA.

On Tuesday, September 3, 2013 3:00:54 PM UTC+5:30, rohila praveen wrote:

Dear Friends,

Please advise about the average clause deduction. While assessing the loss, at which stage/point the average clause should be deducted. Whether before excess or just after the gross assessment of loss.

Thanks,

Praveen Rohila

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[Denesh Saxena]

Dear u r absolutly wrong

D.K. SAXENA

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[BV Kumara Swamy]

[rohila praveen]

[Chand Bhatia]

Dear All

Mr Kumar Swami has put up a point, safe is not salvage. Salvage may even be value of the goods that are damaged. 

In regard to owner of the salvage in case of under insurance and applying average clause is to be understood in principle. The principle of average clause is explained in books that when a subject matter is not insured for full value then it is considered that insured himself is insurer for the difference in total value and value of insurance. 

For example if the the value of some goods is Rs. 100 and insured for Rs. 60 only then insured himself is insurer for Rs. 40.00 for his material. Thus the doctrine of co insurance is applied and the loss due to any peril is distributed in the ratio of insurance between the two insurer. In case of co insurance the salvage is also shared between the two insurers in the ratio of their respective sum insured. 

Thus when average clause is applied then the salvage value is also applied average and insured is entitled for the ratio of the under insurance. 

This point has been discussed on the board many times, but there are people who have still not understood the phenomenon. I suggest them to go through the books on insurance and study the clauses, instead of making misleading statements. 

C K BHATIA

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c k bhatia
09810231248

[mohan israni]

Dear Mr. Rohila Praveen,

Keep the following order of adjustments in assessments in your record for reference in future :

1.    Depreciation

2.    Salvage

3.    Averaging Factor (Valuation Factor)

4.    Excess/DF

To clarify the above further, please apply depreciation factor on the value of Gross Loss; thereafter deduct the value of salvage and then apply the Averaging factor. The worked out assessed loss is to be then adjusted by the Excess/DF to arrive at Net Loss. Hope this will help you in future. Best Wishes                                    Mohan Israni                        

[sai prasad]

Dear sir,
I think Salvage and Average are totally un related. The question of salvage or the intrinsic/commercial value of the damaged property after the occurrence is salvage, whereas the value at risk is the market value or Replacement value according to the policy which is required to be insured at the inception and during the course of the policy period.
Sai Prasad
 

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Subject: Re: Deduction of Average clause

To: insurance-su...@googlegroups.com
CC: insurance...@googlegroups.com; rohil...@yahoo.co.in
From: sabrhas...@gmail.com
Date: Tue, 3 Sep 2013 13:19:14 +0000