passwella.
Menu

JAMB Commerce 2000 Question 20

Question 20

Insurance

Mr. Olatunde took up a fire insurance on a property valued at ₦1000 and the amount insured is ₦800. The property caught fire causing a loss of ₦400. If the insurance was taken with the clause 'with average', what is the amount to be paid by the insurance company?

  1. A.₦320
  2. B.₦420
  3. C.₦460
  4. D.₦560.
Show the answer and explanation

Answer: A (₦320)

Explanation

With average, payment = (sum insured ÷ value) × loss = 800/1000 × 400 = ₦320.