Question

1. A factory was insured against fire with the Insurance company ‘A’ for Rs.70
lakhs and Insurance company 'B' for Rs. 90 lakhs. Due to fire, factory was badly
destroyed. The estimated loss was of Rs.56 lakhs.
a) How much maximum amount of insurance will be received by the factory
owner?
b) Can insurance amount be claimed from both of the companies? If yes what
will be the amount of compensation by each company?
c) Explain the principle of insurance being followed in the above
case.

Answer 1

Answer:

1. A factory was insured against fire with the Insurance company ‘A’ for Rs.70

lakhs and Insurance company 'B' for Rs. 90 lakhs. Due to fire, factory was badly

destroyed. The estimated loss was of Rs.56 lakhs.

a) How much maximum amount of insurance will be received by the factory

owner?

b) Can insurance amount be claimed from both of the companies? If yes what

will be the amount of compensation by each company?

c) Explain the principle of insurance being followed in the above

case.