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WAEC Commerce 1996 Question 27

Question 27

Insurance

Mr. Chidi insured his house against fire. The house was destroyed by flood. Which of the following principles prevented him from being compensated?

  1. A.Uberrimae fidei
  2. B.Subrogation
  3. C.Indemnity
  4. D.Proximate cause
  5. E.Insurable interest
Show the answer and explanation

Answer: D (Proximate cause)

Explanation

Proximate cause: the insurer pays only if the loss was mainly caused by the risk insured (fire), not flood.