Question 23
InsuranceA sole proprietor insured his goods worth ₦200 000 for half the value. There was a fire incident in which goods valued ₦80 000 were destroyed. The value of compensation expected from the insurer is
- A.₦40 000
- B.₦80 000
- C.₦100 000
- D.₦200 000.
Show the answer and explanation
Answer: A (₦40 000)
Explanation
He is under-insured, so he gets the same fraction of the loss as he insured: (100 000 ÷ 200 000) × 80 000 = ₦40 000.