Among a businessman got his godown insured against fire for 1 lakh one day fire took place and goods of the value of Rs 80000 were destroyed Among put up the claim to the insurance company for Rs 1 lakh insurance company did not accept the claim for Rs 1 lakh but accepted for Rs 80000 under which principle of insurance company took the decision
A-Utmost good faith B-Insurable interest C- Indemnity D- Contribution
Plzzzz choose one right and tell me fast
Answers
Answer:
A fire insurance policy has an average clause mentioned in it which takes care of the cases of the under-insurance. In the fire insurance policy, if the assets are insured for less than their full value, the insured is required to bear a proportion of the loss according to the average clause mentioned in the policy document.
Since the fire insurance policy is a contract of indemnity, the insured cannot claim more than the actual amount of loss caused by the fire.
According to the average clause in the fire insurance policy,
If the actual cost of the goods/property is higher than the sum insured for such goods/property, then the insured has to bear the difference.
The insured must bear the cost arising due to the difference between the actual value of goods/property and the amount for which it is insured.
The insurers or the insurance company will only pay for the rateable proportion of the loss.
The average clause applies only when the sum insured is less than the actual value of the goods or the property.
Answer:
Explanation:
Utmost good faith