Illustration B

Insurance - - FEATURE -

Pol­icy

Pol­icy pe­riod: 1.1.2013 to 31.12.2013; Orig­i­nal sum in­sured: RM2,000.00.

Claim

Date of break­age: 1.6.2013; Wind­screen claim: RM1,500.00; Set­tle­ment: RM1,500.00; Bal­ance of orig­i­nal sum in­sured: RM500.00 (or re­duced sum in­sured)

Cur­rency of pol­icy

Re­main­ing pol­icy pe­riod: 1.6.2013 to 31.12.2013; Re­duced sum in­sured: RM500.00

In the event of a sec­ond wind­screen claim of, say, RM1,500.00, dur­ing the cur­rency of the re­main­ing pol­icy pe­riod, the un­der­writer‘s li­a­bil­ity is lim­ited to RM500.00 which is the re­duced sum in­sured. It is not open to an un­der­writer to re­pu­di­ate li­a­bil­ity in a par­tial loss sit­u­a­tion when there is an ex­ist­ing re­duced orig­i­nal sum in­sured dur­ing the cur­rency of this pe­riod. To re­pu­di­ate li­a­bil­ity on the pur­ported ground that the cover has been ter­mi­nated (per para­graph 3), an un­der­writer has com­mit­ted a breach of con­tract un­der para­graph 4, sub­para­graph (a) of the En­dorse­ment. Para­graph 3 and 4 are to be read sep­a­rately and dis­tinctly. In the event of a sec­ond wind­screen claim oc­cur­ring in the re­main­ing pol­icy pe­riod, un­der­writer’s li­a­bil­ity is lim­ited to RM500.00 only. Para­graph 4 (b) Re­in­state­ment of fully utilised orig­i­nal sum in­sured (re­in­stated sum in­sured) As re­gards para­graph 4, sub-para­graph (b) above, this means that the re­duced sum in­sured has been re­in­stated by top­ping-up what has been paid for in the claim back to the orig­i­nal sum in­sured. This is called the re­in­stated sum in­sured. Sim­i­larly, the word “re­in­state­ment” is not de­fined in the pol­icy. As such, its com­mon and or­di­nary mean­ing as de­fined in the dic­tionar­ies shall be taken into ac­count.

Def­i­ni­tion of re­in­state­ment: Ox­ford English Dic­tionary: re­in­state, v. “re­store to a for­mer po­si­tion or state.” Ox­ford Ad­vanced Learner’s Dic­tionary: re­in­state v. “re­store to a pre­vi­ous im­por­tant po­si­tion.”

Illustration C gives a vivid pic­ture:

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