Mr Olatude took up a fire insurance on a property valued at N1000 and the amount insured is N 800. If the insurance was taking with the clause ‘with average ‘, What is the amount to be paid by the insurance company?
GIVEN: Property value = N1000, Amount insured = N800, Loss = N1000
Ratio of insurance coverage = \(\frac{800}{1000}\) = 0.8
Amount payable = loss x ratio = 400 x 0.8 = N320
NOTE: the clause "average"
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