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JAMB Commerce 2001 Question 26

Question 26

Insurance

The indemnification of Ama by his insurance company after a fire disaster means that he

  1. A.has been guaranteed by the insurance company
  2. B.will be cleared of any fault by the insurance company
  3. C.has been covered by the insurance company
  4. D.will be covered to the limit of the amount in the policy.
Show the answer and explanation

Answer: D (will be covered to the limit of the amount in the policy.)

Explanation

Indemnity restores the insured to his former position, but only up to the sum insured in the policy.