Kindlustusumma

Kindlustusumma, or the sum insured, is the maximum amount an insurer will pay for a covered loss under an insurance policy. It represents the contract’s limit of liability and is set when the policy is issued. The sum insured may reflect the replacement value, agreed value, or market value depending on the policy and the insured item.

For property and vehicle insurance, the sum insured often corresponds to the estimated replacement cost or current value of the property, ensuring that a loss can be repaired or replaced up to that amount. In life and health insurance, the sum insured is typically the death benefit or the agreed payout in the event of a claim.

Premiums are usually calculated in relation to the chosen sum insured: higher sums insured lead to higher premiums. It is important to select a sum insured that adequately reflects the value of what is being insured, because under-insurance can result in a reduced payment if a loss occurs. In many policies, if the insured sum is lower than the actual value, settlement may be proportional to the ratio of the sum insured to the actual value (often referred to as average or coinsurance in some markets).

Determining the right kindlustusumma involves valuing the asset or risk, considering inflation and potential depreciation, and reviewing policy terms for how replacement value versus actual cash value is treated. Regular reassessment is advisable after major changes in value or renovations. The sum insured is separate from deductibles and sub-limits that may apply to specific perils within the policy.

Notes: the specific terminology and rules may vary by jurisdiction and insurer; readers should consult their policy documents for the exact definition and conditions applicable to their kindlustusumma.