Overinsurance and under-insurance

Question 1

What is over-insurance?

Answer 1

When the sum insured is greater than the amount of loss that the insured would suffer should the risk arise.

Question 2

Can an over-insured person recover more than the loss that they actually suffered?

Answer 2

No.

Question 3

What is under-insurance?

Answer 3

Insuring a sum that is less than the value of the insured’s interest.

Question 4

What is a person who under-insures his property entitled to?

Answer 4

Generally entitled to recover any loss that is actually suffered, up to the sum that is insured.