Ritesh insured his factory for rupees 500000 against fire. Due to fire in
his factory, he suffered a loss of stock worth rupees 300000. He is of the
opinion that can recover the entire policy amount of rupees 5 lakh from the
insurance company? Do you think Ritesh is right? State the relevant
insurance principle in this regard.
Answers
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16
Answer:
Principle of Indemnity
Explanation:
No, Ritesh is wrong
The insurance contracts are contracts of Uberrima fides so one should not cheat other.
Principle of Indemnity states that insurance is security only against risk of loss . And insured party should not collect more that the actual loss in event of damage.
So he should only claim 300000
* Principle of indemnity is only applicable to fire and marine insurance contracts not to life insurance contracts
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