A sole proprietor insured his goods worth N200,000 for half the value. There was a fire accident in which goods valued N80,000 were destroyed. The value of compensation expected from the insurer is
N40,000
N80,000
N100,000
N200,000
Explanation
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Discussions (18)
Correct answer is "A".
Solution:
using Average clause of fire insurance
Actual value of goods= 200,000
Half the "actual value", he insured his goods. Therefore,
Amount insured= 100,000
Amount loss= 80,000
thus:
=100,000 x 80,000/ 200,000
=8,000/ 200,000
=N40,000
A is correct answer b'cos d good DAT ar destroyed is #80,000 dat means u wil divide it by 2 is give 40k
d formula 4 fite insurance under with clause z amount insured * actual loss divided by actual value of property, but dere z no actual value so d anwser z b cos an insurer will only indemnify an insured based on d actual loss of property
Frm my own understanding when u insure half d value of a particular goods in d case of damage d insurance company will only compensate d actual cost of d damaged goods 80000 if it is below d insured amount 100000 and nt d insured amount 100000 unless d goods damaged s more dan d insured amount
Wrong answer. Goods destroyed were worth 80,000. The goods were worth 200,000. He insured half d value and half is 100,000..that is: 80,000/200,000 x 100,000/1. The correct answer is A.
The question z wrong ... Cuz in a fire insurance .. We have with average clause and no average clause .. The question z suppose to specify so that we can knw what to do
The question z wrong ... Cuz in a fire insurance .. We have with average clause and no average clause .. The question z suppose to specify so that we can knw what to do ... According to my calculation ... The answer For with average Clause : #40000 while No average clause : #80000
My scholars like yap that C is wrong it's A bcos AMT INSURED* TOTAL LOSS DIVIDED BY ACTUAL VALUE that is 1/2*200000=100000*80000=1800000000/200000=40000
