Definition : Insurance - Proportional rule

Damage insurance rule limiting the amount of the indemnity paid by the insurer in the event of insurance insufficiency (underinsurance). In the case of a partial loss, the indemnity is reduced proportionally to the premiums’ rate paid in relation to the premiums' rate that would have been due, if the amount of insurance had been equivalent to the value of the property (value that should have been insured). In the case of a total loss, the insurer is released by the payment of the amount of the insurance. There needs to be a clause in the insurance policy deleting or amending it in order to grant more rights to the insured, so that the latter avoids its application.

  WARNING! This rule must be distinguished from the co-insurance clause.

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Question: We suffered water damage. Three apartments, including mine, were affected by the breakdown of a water heater. The co-ownership’s insurer refuses to compensate us completely, claiming that our syndicate has paid too low a premium compared to the true risk insured. More specifically, it appears that the directors took out inadequate insurance cover with a reference to a rule proportional to 80%. I do not understand that. Is the insurer right not to fully compensate us?
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The Law and the overwhelming majority of declarations of co-ownership require that syndicates of co-owners insure their building. This may seem surprising at first glance as the syndicate does not own the private portions nor the common portions. However, its main object is to ensure the preservation and the longevity of the building and to manage and administer it diligently following rules of the trade. This is why the legislator has given to the syndicate an insurable interest and has made it compulsory that it subscribe building insurance.  
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