1. Insurance– a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium : many new borrowers take out insurance against unemployment or sickness. (from my mac)
ORIGIN late Middle English (originally as ensurance in the sense [ensuring, assurance, a guarantee] ): from Old French enseurance, from enseurer (see ensure ). Sense 1 dates from the mid 17th cent.

-something that will bring your assets back to its original setting after the loss or damage in return for an annual premium payment.

2. Participation or deductible– a fee that should be shouldered by the assured in claiming for a loss in a car accident. There are 2 kinds of participation or deductible for private vehicles. If your vehicles are a sedan or a 2 door sports coupe or anything similar,your participation fee falls under the PC (private car) category which is .5% of the amount insured. If your vehicles are SUVs, AUVs,Vans, FBs or anything similar, then your participation fee falls under the CV (commercial vehicle) category which is 1% of the amount insured.

It is said that in any accident, the driver of the vehicle has a liability for the vehicles damages. That is one reason why the insurance commission came out with a participation fee or deductible. 2. It is also to prevent petty claims that is why there is a minimum claim limit in every car insurance policy. 3. It is also to prevent fraudulent claims.

3. Depreciation– a fee that is carried out to the brand new genuine parts to be replaced on your vehicle. This fee only applies if your vehicle has an auto parts to be replaced because of the accident. There is a chart for this:

Brand New up to 3 years old from the time of purchase- exempted from the depreciation fee.

3yrs and 1 day upto 4years- 20% of the parts value.

4yrs and 1 day upto 5 years-25% of the parts value.

5yrs and 1 day upto 6 years-30% of the parts value.

6yrs and 1 day upto 7 years- 35% of the parts value.

Over 7 years- 40% of the parts value.

Batteries, Tires, Ball Joints, Tire Rods and Shock Absorbers automatic 45% for vehicles over 3 years old.

*Rate of Depreciation may vary according to your insurance company however the rate should be near to this. In addition, if you opted for a surplus,no depreciation will be charged but not all 5 star casa allows surplus parts.

In a nutshell, Depreciation is your share for the buying of brand new parts to be replaced for your vehicle. Since your vehicle is already 2nd hand and the parts that will be given to you is brand new,therefore you should have a fair share on the cost. Depreciation is not similar to participation or deductible.

4. Indemnity– is a comprehensive form of insurance compensation for damages or loss, and in the legal sense, it may also refer to an exemption from liability for damages. Indemnity is considered to be a contractual agreement between two parties whereby one party agrees to pay for potential losses or damages caused by another party. A typical example is an insurance contract, in which the insurer or the indemnitor agrees to compensate the other (the insured or the indemnitee) for any damages or losses in return for premiums paid by the insured to the insurer. With indemnity, the insurer indemnifies the policyholder—that is, promises to make whole the individual or business for any covered loss. (investopedia)

5. Double Indemnity- When you collect or claim from the adverse party and the insurance for the same damage. This is an unethical practice because you are taking away your insurance’s right to subrogate which is defined below.

6. Subrogation- Subrogation literally refers to the act of one person or party standing in the place of another person or party. Subrogation effectively defines the rights of the insurance company both before and after it has paid claims made against a policy. Subrogation makes obtaining a settlement under an insurance policy go more smoothly. In most cases, an individual’s insurance company pays its client’s claim for losses directly, then seeks reimbursement from the other party, or his insurance company. The insured client receives payment promptly, which is what he pays his insurance company to do; then, the insurance company may pursue a subrogation claim against the party at fault for the loss. (investopedia)


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