Over –insurance and under-insurance

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Over insurance occurs when the insured states a value for the property being insured that is higher than the true value of property.one is only compensated the true value of property although the insured pays higher premium.

Under insurance-this occurs when the insured states a value that is less than the true value of the property being insured. Compensation will only be for the sum insured ,less than the true value of the property.



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