Question

1. What you mean by average clause in Insurance? Calculate the amount of claim using the following details. Value of stock on the date of fire - 25.000 Value of stock saved from fire 5.000 Value of the Insurance Policy - 20,000​

Answer 1

Answer:

Claim = Loss Suffered x Insured Value/Total Cost. The object of such an Average Clause is to limit the liability of the Insurance Company. Both the insurer and the insured then bear the loss in proportion to the covered and uncovered sum.