Claim settlement under CAR policy
CAR policy can be issued either to the Principal/Owner or the Contractor with the same sum insured i.e. project cost. If there is any loss or damage takes place, the claim amount will be different for Principal and Contractor. The Principal will get the claim amount as per contract with the Contractor. If the Contractor has taken the policy, the basis of settlement in the policy is actual expenditure incurred to repair it, therefore, the profit element will be reduced from the claim amount.