Egypt – Insurance Federation warns about “coinsurance rule”
Friday, 12 02 2016, Category: Insurance and Reinsurance, Country: Egypt
The Insurance Federation of Egypt warned all customers in the republic about the necessity of reviewing the value of insured assets such as buildings, equipment, inventory or other assets given the current prices of the market. Customers should thus notify the insurance companies about the reevaluation of insured amounts in order to avoid the application of the “coinsurance rule”.
Mr. Abdul Rauf Kotb the President of the Insurance Federation of Egypt said that local and international contracts usually include the “coinsurance rule”, which implies that the asset value should be equivalent to the insured value in the contract; otherwise the insured will have to bear the difference in percentage between the insured amount and the market of value of the asset when the risk does materialize.
The request of the Insurance Federation of Egypt to reevaluate the value of insured assets follows the decision of the central bank to liberalize the EGP exchange rate against foreign currencies.
Source: Al Mal News