MANAGEMENT

Detailed explanation-1: -The 80% rule is adhered to by most insurance companies. According to the standard, an insurer will only cover the cost of damage to a house or property if the homeowner has purchased insurance coverage equal to at least 80% of the house’s total replacement value.

Detailed explanation-2: -The 80/20 Rule generally requires insurance companies to spend at least 80% of the money they take in from premiums on health care costs and quality improvement activities. The other 20% can go to administrative, overhead, and marketing costs.

Detailed explanation-3: -For example, if 80% coinsurance applies to your building, the limit of insurance must be at least 80% of the building’s value. If the policy limit you have selected does not meet the specified percentage, your claim payment will be reduced in proportion to the deficiency.

Detailed explanation-4: -It is simply the cost to replace an asset with something of the same value. This cost does not fix and depends on the prevailing market rates. For instance, if you have building insurance, the property market rates can go up and down so the value of the building.