Several fire policies do not turn one property loss into several recoveries
A Korean apartment may have a group fire policy arranged by the management office while the resident also maintains personal home fire cover.
A business may likewise split one building, fixtures, or inventory across several insurers.
Adding every insured amount can make protection look generous, but property insurance is designed to indemnify the covered loss rather than create a recovery above that loss.
At the same time, having several contracts does not guarantee complete protection because valuation rules, proportional settlement, limits, deductibles, and exclusions can leave a household or business with a gap.
The useful starting point is each policy’s stand-alone liability: what that policy would pay if no other policy existed.
Only after building those amounts should the applicable other-insurance formula allocate the covered loss among insurers.
This calculator supports up to five policies, compares an insured-amount allocation with a stand-alone-liability allocation, and shows how removing one policy changes estimated payout, uncovered loss, and annual premium.
It does not decide a claim or recommend that a policy be reduced or cancelled.
Korea-specific scope
The legal references and policy example on this page are Korean.
Amounts are entered in KRW, and the model follows the current Korean Commercial Act and a current Korean insurer wording checked on August 29, 2026.
It should not be used as a substitute for another country’s contribution, coinsurance, or valued-policy rules.
Commercial Act Article 672 and policy wordings can point to different allocation bases
The current Commercial Act record checked through Korea’s National Law Information Center has law ID 001702, MST 272919, Act No. 20991, and an effective date of July 23, 2026.
Article 672 addresses several contracts covering the same insured interest against the same occurrence when their insured amounts exceed the insurance value.
Each insurer is jointly liable within its own insured amount, while the insurers’ internal burden is allocated in proportion to their insured amounts.
The article also requires the policyholder to notify each insurer about the other contracts.
Actual policy wording can add a more specific distinction.
Hyundai Marine & Fire Insurance’s official Direct H Business Fire Insurance wording, product Hi2601 effective January 1, 2026, allocates by insured amount when the contracts use the same payment method.
When payment methods differ, it allocates by each policy’s stand-alone liability, defined as the amount payable assuming the other contracts did not exist.
The wording’s liability example uses a loss of 80 and stand-alone liabilities of 60 and 40, producing allocations of 48 and 32.
Korean multiple fire policy authorities and calculator treatment| Authority or case | Reference | Calculator treatment |
|---|
| Commercial Act Article 672 | Same interest, same occurrence, aggregate insured amount above value. | Offers insured-amount allocation and separate confirmation flags. |
| Same payment method in the checked wording | Loss multiplied by this insured amount over aggregate insured amounts. | Use the insured-amount basis only after checking the wording. |
| Different payment methods in the checked wording | Loss multiplied by this stand-alone liability over aggregate stand-alone liabilities. | Build each stand-alone amount first, then select that basis. |
| Commercial Act Article 674 | Partial-insurance ratio is the default, but a different agreement can pay loss within the insured amount. | Keeps statutory proportional and first-loss methods separate. |
Build stand-alone liability before allocating the loss
The calculator caps the property-loss base at the lower of entered loss and entered insurance value.
It does not automatically add debris removal, loss-prevention expense, replacement-cost extensions, liability cover, temporary accommodation, or business interruption.
Each active policy then receives one of four stand-alone methods.
Statutory partial-insurance ratio
The loss base is multiplied by insured amount divided by insurance value and capped at the insured amount.
The entered deductible is then subtracted.
Select this only when the policy does not replace the statutory default with another settlement agreement.
Wording-confirmed 80% method
If the insured amount reaches 80% of value, covered loss is taken up to the insured amount.
Below that threshold, loss is multiplied by insured amount divided by 80% of value.
The 80% threshold is a selectable wording assumption, not a universal Korean statutory constant.
Loss up to insured amount
Covered loss is capped at the insured amount before the deductible.
Use this for a confirmed first-loss or similar agreement rather than assuming every replacement-cost policy uses it.
Insurer-confirmed manual amount
Enter the final amount the insurer calculated assuming no other policy existed.
That amount should already reflect limits, exclusions, and deductibles, so the calculator does not subtract the deductible a second time.
A careful six-step workflow
- Define one insured interest.
Keep building, fixtures, contents, and inventory separate unless the insurer supplies an allocation for a combined limit.
- Match valuation bases.
Do not combine actual value, replacement value, and agreed value without reconciling the wording and valuation date.
- Enter up to five policies.
Use the premium attributable to this coverage item rather than the premium for unrelated riders.
- Build each stand-alone liability.
Choose a formula only when the policy supports it, or request the insurer’s written calculation.
- Select the contribution clause.
Confirm whether the policies use the same payment method and which ratio applies.
- Stress the result.
Change loss size, deductible, and active contracts, then obtain before-and-after renewal illustrations before changing coverage.
Reading the synthetic example
The example button loads synthetic values rather than Korean market averages.
Property value is KRW 300 million and the entered fire loss is KRW 100 million.
An apartment group cover has a KRW 240 million insured amount and KRW 60,000 annual premium, while a personal cover has a KRW 120 million insured amount and KRW 120,000 annual premium.
Both use the selectable 80% method solely for the worked example.
Synthetic multiple fire policy allocation example| Metric | Group cover | Personal cover | Total |
|---|
| Insured amount | KRW 240,000,000 | KRW 120,000,000 | KRW 360,000,000 |
| Stand-alone liability | KRW 100,000,000 | KRW 50,000,000 | KRW 150,000,000 |
| Insured-amount allocation | KRW 66,666,667 | KRW 33,333,333 | KRW 100,000,000 |
| Annual premium | KRW 60,000 | KRW 120,000 | KRW 180,000 |
Removing the personal cover still leaves the group policy with a KRW 100 million stand-alone amount for this one entered loss, producing no gap and a KRW 120,000 annual premium difference.
That does not establish that the personal policy is redundant.
It may cover contents, personal liability, temporary accommodation, water damage, or causes excluded by the group policy, and a larger loss can produce a different gap.
What each result means
Amount above property value
This is aggregate active insured amounts minus entered value.
It is not an automatic premium refund, claim increase, or legal conclusion that every policy covers the same interest.
Overlapping stand-alone exposure
This is aggregate stand-alone liability minus the final loss-capped payout.
It signals allocation, not insurer underpayment or a premium-waste amount.
Coverage gap
This is loss base minus estimated total payout.
It can reflect underinsurance, limits, and deductibles, while separate expense covers remain outside the model.
Lowest-premium gap-free subset
The calculator checks at most 31 non-empty subsets and returns the least expensive one covering this entered loss.
It is scenario-specific arithmetic, not policy optimization or cancellation advice.
Frequently asked questions
Does an apartment group policy automatically duplicate my personal fire policy?
No.
Obtain the group certificate and endorsements, then confirm insured persons, common and private areas, unit contents, causes of loss, and insured interests with both the management office and personal insurer.
Is every Korean fire policy subject to an 80% threshold?
No.
Use that method only when the policy wording confirms the same threshold and formula.
Otherwise select the applicable method or request an insurer-calculated stand-alone amount.
Does an insured amount above value create a refund?
Not automatically.
Commercial Act Article 669 and the specific contract history require a separate review of value, good faith, reduction timing, and premium treatment.
Ask the insurer in writing rather than treating the calculator’s excess display as a refund estimate.
Can I cancel every policy outside the lowest-premium subset?
No.
That subset addresses only the entered property loss and methods.
Compare all coverage items, exclusions, full-loss scenarios, effective dates, and new underwriting before making any contract change.
Renewal safeguards and exclusions from the model
- Revalue the property on the same basis and date used by the policy.
- Separate building, machinery, fixtures, contents, and inventory when a combined limit masks item-level gaps.
- Confirm whether each deductible applies per policy, per item, or once per occurrence.
- Record other-policy notices and insurer responses in email or another durable written form.
- Compare liability, temporary accommodation, debris removal, water damage, and business interruption separately.
- Align effective dates so a change does not create an uninsured interval.
What this calculator does not decide
It does not decide cause of fire, intent or gross negligence, insured interest, valuation, salvage, mitigation expense, replacement-cost extensions, liability, business interruption, subrogation, limitation periods, or dispute outcomes.
For an actual loss, disclose every policy, follow each insurer’s claim instructions, and obtain professional loss-adjusting or legal review when facts or wording are disputed.
Turn the allocation table into a written insurer checklist
Save the entered value, loss, stand-alone liabilities, allocation basis, current result, and one-policy-removal table.
Send the same questions to the apartment manager and every insurer, then request before-and-after renewal illustrations before reducing or cancelling any cover.