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A Model to Evaluate the Rebuilding Costs of Dwellings

Published online by Cambridge University Press:  29 August 2014

Freddy Corlier ,
Jean-François Ingenbleek  and
Jean Lemaire
Freddy Corlier*
Affiliation:
Université Libre de Bruxelles
Jean-François Ingenbleek*
Affiliation:
Université Libre de Bruxelles
Jean Lemaire*
Affiliation:
Université Libre de Bruxelles
*
Institut de Statistiques, C.P. 210, 50 Boulevard du Triomphe, B-1050 Bruxelles.
Institut de Statistiques, C.P. 210, 50 Boulevard du Triomphe, B-1050 Bruxelles.
Institut de Statistiques, C.P. 210, 50 Boulevard du Triomphe, B-1050 Bruxelles.
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Abstract

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Under-insurance is one of the scourges of homeowner insurance: when it is established after a claim that the rebuilding cost of a dwelling has been underestimated by the policyholder, the proportional rule applies in the sense that the indemnity is reduced in proportion of the under-insurance. To avoid this dramatic problem, prejudicial to all parties concerned, a Belgian company has in 1983 marketed a model to evaluate rebuilding costs: if the policyholder fills in correctly a two-page form, the company forgoes the application of the proportional rule.

The construction of this model is explained; then, it is shown how a statistical study sponsored by the Professional Union of Insurance Companies allowed the model to improve.

Type
Workshop
Information
ASTIN Bulletin: The Journal of the IAA , Volume 16 , Issue 1 , April 1986 , pp. 45 - 62
Copyright
Copyright © International Actuarial Association 1986