Dual Insurance, re-insurance and underwritting insurance

                                                              Dual  Insurance

If someone is taking two or  more insurance policies for the same property or an asset from two or more insurance companies that is considered as dual insurance 

But  in the event of damage, compensation is paid for the true damage only.

However in the case of  life insurance , s the principle of indemnity does not apply , compensation could be obtained under all the policies ( Face value )

Eg: If a motor vehicle worth Rs. 500000/= is  insured for the  same value with three insurance companies , the fully indemnity from the
insurance policies of  all three companies that could be obtained is only Rs. 500000/=

But this  will not apply to life insurance . Compensation could be obtained from all the companies up  to the face value.

                           Re-insurance
 
This is to insure the insurance policies in the possession of  the insurer with a local of foreign insurance company , with the knowledge of the insured.

In this case  the relevant premium is paid by the insurer. Re-insurance is done for  the purpose of minimizing the risk of the insurer.

Eg : The oil tanks of the Srilankan Petroleum Corporation are reinsured with the British " Loyld' s reinsurance by the Srilankan Insurance Corporation.

                       Underwritting Insurance

Underwritting  is insuring assets with a very high value with sveral insurers at the same time. Here under one policy several insurance companies under take the risk of it.Aeroplanes, Ships and large scale projects which have high values are insured in this manner.


                                  The cover note 

When an insurance company agrees  to undertake the risk, it will inform the insured the premium to be given . When the first premium is paid cover begins to continue . For an evidence of this the company sometimes issues a "Cover note " which is  a temporary document until the policy is being prepared . In this case of motor insurance a certificate of insurance is issued as evidence of cover in addition to the policy and any cover note