{"id":13626,"date":"2023-11-14T08:11:37","date_gmt":"2023-11-14T07:11:37","guid":{"rendered":"https:\/\/pibgroupiberia.com\/?p=55921"},"modified":"2025-05-23T07:44:20","modified_gmt":"2025-05-23T05:44:20","slug":"proportional-equity-insurance-rule","status":"publish","type":"post","link":"https:\/\/pibgroupiberia.com\/en\/regla-proporcional-equidad-seguros\/","title":{"rendered":"What is the proportional rule and the fairness rule in insurance? How is it applied?"},"content":{"rendered":"

Imagine you have just bought a new house for 200,000 euros and you decide to insure it, but you do so at 100,000 euros, which is less than its real value. This is what is known as a situation of<\/strong> underinsurance<\/strong><\/a>. If, unfortunately, your home suffers any kind of partial loss, such as a burglary or a flood, you will need your insurance to cover the damage and, at that time, the proportional rule or rule of equity will come into play.<\/strong><\/p>\n

But... Do you know what the proportional rule is and how exactly it is applied? We explain it to you in this new post.<\/p>\n

What is the proportional rule in insurance?<\/h2>\n

The proportional rule is the contractual formula or principle that is applied in all damage policies. This rule appears on the scene when there is a case of underinsurance, i.e. when the insured sum is lower than the real value of the insured object at the time when the loss occurred.<\/p>\n

According to the proportional insurance rule, the insurer's indemnity is reduced proportionally <\/strong>The difference between the agreed premium and the premium that would have been charged if the true size of the risk had been known.<\/p>\n

How is the proportional rule applied?<\/h2>\n

The application of the proportional rule is based on a mathematical formula. Remember the example we gave you at the beginning?<\/p>\n

Well, in this case, if the insured amount is 100,000 euros, and your home is actually worth 200,000 euros, this means that you are only insured for 50% of its real value.<\/p>\n

If the damage caused to it amounts to 25,000 euros, your insurance company will cover 50% of the damage, which corresponds to a total of 12,500 euros in compensation for the damage suffered.<\/p>\n

By the way! If you are interested in taking out a policy for your home, remember to take a look at our post on the Best Home Insurance in 2023<\/a>.<\/p>\n

When does the proportional rule not apply in insurance?<\/h2>\n

You already know a little more about the insurance equity rule, but, at this point, one of the main doubts you may have is... what does the law say about it?<\/p>\n

For it is precisely the Law 50\/80 on Insurance Contracts in Spain<\/strong> which establishes the proportional insurance rule. However, the regulation also mentions that an insurance company may enter into agreements with its customers to exclude this rule.<\/p>\n

If both parties agree, it is perfectly legal not to apply the equity rule, but only as long as it is stated in the policy contract.<\/p>\n

This means that, under certain circumstances and if there is mutual agreement<\/strong>, You can determine with your insurance company what compensation would be paid to you in the event of a claim, without having to apply proportionality based on the difference between the premium paid and the premium you should have paid.<\/p>\n

What is underinsurance and how is it calculated?<\/h2>\n

If we talk about the proportional rule in insurance, it is essential to understand the concept of underinsurance, which we have already discussed at the beginning of this article.<\/p>\n

Underinsurance occurs when the declared value of an insured good is lower than its real value, and is the main trigger for insufficient compensation in the event of a claim.<\/p>\n

In these cases, we use the proportional rule of insurance to calculate the amount of compensation<\/strong>, The insured value shall be adjusted to the ratio between the insured value and the true value.<\/p>\n

How can underinsurance be avoided?<\/h2>\n

Do you want to avoid underinsurance? Then it would be better if, before you take out any policy, you set up an accurate and fair statement of the value of assets<\/strong> you are going to insure.<\/p>\n

For this you will need detailed and up-to-date information about your insured property. For example, if you want to insure your car, you will need the exact model and a detailed list of all its accessories. And, if what you are going to contract is a home insurance,<\/a> it will be essential that you know the exact value of your container and contents.<\/p>\n

A correct valuation will ensure that the premium paid is appropriate.<\/strong> And, in the event of a claim, you will be able to receive the expected compensation, without having to apply the proportional rule. And how do you know if you are valuing your assets properly? For this task it is always advisable to have the help of a professional brokerage, such as PIB Group Iberia.<\/p>\n

With more than 30 years of experience behind us, property valuation is one of our strengths.<\/strong><\/p>\n

Moreover, not only is it essential to value your assets properly at the time prior to the contract, but it is also necessary to review this value periodically, in case it has changed. And we can help you here too.<\/p>\n

\"Contact<\/a><\/p>\n

Get in touch with contact PIB Group Iberia<\/a> and forget about having to learn how the proportional rule is applied in insurance - we are here to advise you!<\/p>","protected":false},"excerpt":{"rendered":"

Imagina que acabas de comprarte una nueva casa por 200.000 euros y decides asegurarla, pero lo haces a 100.000, un valor inferior a su valor real. Es lo que se conoce como una situaci\u00f3n de infraseguro. Si, desafortunadamente, tu vivienda sufre cualquier tipo de siniestro parcial, como un robo o una inundaci\u00f3n, vas a necesitar […]<\/p>\n","protected":false},"author":14,"featured_media":13627,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"yasr_overall_rating":0,"yasr_post_is_review":"","yasr_auto_insert_disabled":"","yasr_review_type":"","footnotes":""},"categories":[16],"tags":[],"class_list":["post-13626","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-particulares"],"yasr_visitor_votes":{"stars_attributes":{"read_only":false,"span_bottom":false},"number_of_votes":0,"sum_votes":0},"_links":{"self":[{"href":"https:\/\/pibgroupiberia.com\/en\/wp-json\/wp\/v2\/posts\/13626","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pibgroupiberia.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pibgroupiberia.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pibgroupiberia.com\/en\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/pibgroupiberia.com\/en\/wp-json\/wp\/v2\/comments?post=13626"}],"version-history":[{"count":0,"href":"https:\/\/pibgroupiberia.com\/en\/wp-json\/wp\/v2\/posts\/13626\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pibgroupiberia.com\/en\/wp-json\/wp\/v2\/media\/13627"}],"wp:attachment":[{"href":"https:\/\/pibgroupiberia.com\/en\/wp-json\/wp\/v2\/media?parent=13626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pibgroupiberia.com\/en\/wp-json\/wp\/v2\/categories?post=13626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pibgroupiberia.com\/en\/wp-json\/wp\/v2\/tags?post=13626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}