How to understand sum insured year better? What i understand is that it is : (Sum Insured under a policy)*(Number of years for which it is provided). Now for a two year policy, will that mean the exposure is 2*Sum Insured? But, if policy is a 2 year policy, i dont think that the sum insured is annually applied, and hence doubled. So, sum insured is limited to what it is for the entire 2 year period, right? But if no, then that means sum insured is specified on an annual basis? (Reference is from Measure of exposure for Household buildings insurance)
An exposure measure is an indicator of the amount of risk. The longer the policy, the more risk there is. The higher the sum insured the more risk there is. If you have the same sum insured for two years, rather than one year, then you've got twice the amount of risk.
