LOAN COLLATERAL AND LEASE OBJECT INSURANCE REQUIREMENTS

Transcription

1 LOAN COLLATERAL AND LEASE OBJECT INSURANCE REQUIREMENTS Collateral Insurance type and policy requirement Sum Insured risks (minimum requirements) Deductible (maximum) Replacement cost value which means the minimum cost of replacing the same property (buildings, structures, objects) performing the same use functions in the same quality. Buildings, structures Property insurance Underinsurance not permissible, i.e. the sum, in insurance against and damage under one or several insurance contracts in respect of one and the same risk, may not be lower than the value of the object. Recommended replacement cost (depending on the construction and decoration quality): Wooden construction / log cabin: - private houses, saunas from EUR /m 2 - apartment buildings and apartments from EUR /m 2 - sheds from EUR 71.14/m 2 fire, lightning, explosion, the falling down of aircraft or their cargo; incidents with utilities (water, heating, sewage and similar systems); burglary, robbery, vandalism with breaking and entering; Masonry/mixed type: - private houses, saunas from EUR /m 2 - apartment buildings and apartments from EUR /m 2 - balconies, terraces, basements from EUR /m 2 If construction or refurbishment work is in progress, then insurance must be in force also during such repair or construction work. Metal + masonry/ reinforced concrete: - retailing buildings from EUR /m 2 - manufacturing buildings from EUR /m 2 - auxiliary buildings, warehouses (heat-insulated, with utilities) - from EUR /m 2 - auxiliary buildings, warehouses (non-heat-insulated,

2 without utilities) - from EUR /m 2 - soviet-era metal hangars from EUR /m 2 Masonry/reinforced concrete: - office buildings from EUR /m 2 - retailing buildings from EUR /m 2 - manufacturing buildings from EUR /m 2 - auxiliary buildings, warehouses (heat-insulated, with utilities) - from EUR /m 2 - auxiliary buildings, warehouses (non-heat-insulated, without utilities) - from EUR /m 2 If the physical wear-and-tear of the building/structure exceeds 50%, it can be at no less than the actual value (replacement value minus physical wear-and-tear). The physical wear-and-tear of a building/structure exceeds 50% if they are in operation but have not had capital repairs for over 50 years. If the sum stated in the loan agreement is lower than the replacement value, the customer may submit an insurance policy for the sum stated in the loan agreement. If the insurance objects (buildings) stated in the insurance policy are to be treated as separate risks (i.e. one fire, explosion would not result in destruction of all the objects), then, subject to the bank s approval of the sum (the limit), it may be permissible to set up insurance according to the first (first risk) principle. *) No insurance is required for buildings and structures if all of the following conditions are satisfied: their absence would not lower the value of the collateral; they are not in use; their physical wear-and-tear exceeds 70%; there are no plans to renovate, reconstruct or tear them down. Land plot Intangible investments Technological facilities (already Property insurance at the value of a new item (for ages of up to 3 years - the price of machinery unit or equipment of new

3 installed), gear, equipment, machinery (loaders, tractors, etc.) functionality and quality, including the cost of transportation and installation / assembly work); no less than the market value (if older than 3 years). fire, lightning, explosion, the falling down of aircraft or their cargo; incidents with utilities (water, heating, sewage and similar systems); burglary, robbery, vandalism with breaking and entering; Cars, motorcycles CASCO (voluntary road motor vehicle insurance) if the customer s liabilities exceed EUR Road traffic accident, natural calamities, fire, falling of an object or substance, third-party unlawful acts (incl. theft and robbery) On damages: max EUR On total destruction: max. 20% of the Deductible on theft, robbery: max 20% of the Commercial vehicles CASCO (voluntary road motor vehicle insurance) Road traffic accident, natural calamities, fire, falling of an object or substance, third-party unlawful acts (incl. theft and robbery) On damages: max EUR On total destruction: max 20% of the Deductible on theft, robbery: maks. 20% no zaudējuma Watercraft Marine Hull (watercraft insurance) The objects are against the consequences (damage, destruction, theft, robbery) of the following events: collision with objects in water; capsizing; drowning; damage by natural calamities 20% of the amount of

4 Securities and equity participation Stock (commodities and materials, products in progress, ready products) Property insurance Acquisition value (including taxes and cost of transportation). The sum must match the expected maximum amount of stock in the warehouse during insurance period. (storm, thunderstorm, tsunami, lightning bolt); fire, blast, explosion; breakdown of the construction or systems of buildings (where or next to which the object is located), the falling of their separate elements or items on or inside them; ship running aground; deliberate unlawful acts by other persons (except fraud, extortion, appropriation): theft, robbery, hijacking or attempted hijacking; larceny; arson, bombing, damaging. fire, lightning, explosion, the falling down of aircraft or their cargo; incidents with utilities (water, heating, sewage and similar systems); burglary, robbery, vandalism with breaking and entering; Claims (accounts receivable) Commodities / raw materials, technological facilities during transportation Technological facilities during installation / assembly Cash in a special guarantee cash collateral account, Cargo (cargo insurance during transportation) EAR (Erection All Risks insurance) Purchase value All risks (ICC institute cargo clauses A) Purchase value EAR (Erection All Risks insurance)

5 deposits PROPERTY INSURANCE ADDITIONAL REQUIREMENT Business discontinuation insurance (annex to property insurance policy). Required if the outstanding loan amount exceeds the loan collateral s replacement value by EUR 711, Constant, turnover-unrelated costs (e.g. public utilities, rent, transport cost, advertising, salaries, social payments, licences, state duties, interest on loans, insurance premiums, property tax, land tax, natural resources tax, etc.) and the expected net profit for at least 6 months. 3 weeks