What is meant by ‘reinstatement of sum insured’? Does it figure in all cases where the insurers settle the claims?
On payment of a claim under a policy, the sum insured automatically gets reduced by the amount of claim paid. In order to bring back the sum insured to its original level, the insured has to reinstate the sum insured by payment of a pro-rata additional premium on the amount reinstated. Reinstatement of sum insured does not figure in all claims. Particularly in insurance contracts pertaining to liability where the limits of the liability are specified against any one year and any one incident, the sum insured cannot be reinstated.
On payment of a claim under a policy, the sum insured automatically gets reduced by the amount of claim paid. In order to bring back the sum insured to its original level, the insured has to reinstate the sum insured by payment of a pro-rata additional premium on the amount reinstated. Reinstatement of sum insured does not figure in all claims. Particularly in insurance contracts pertaining to liability where the limits of the liability are specified against any one year and any one incident, the sum insured cannot be reinstated.
