Question 40
InsuranceUse the following information: Madam Tope insured her shop premises for the sum of D60,000, when insuring the shop, she did not tell the Insurance Company that she cooks in the shop, but told the Insurance Company that she sells second hand clothes. Hence she insured her store against natural causes. Tope's shop got burnt yesterday by fire from the cooking pot.
Which of the following insurance principles will prevent her from claiming compensation?
- A.Indemnity
- B.Insurable interest
- C.Proximate cause
- D.Utmost good faith.
Show the answer and explanation
Answer: C (Proximate cause)
Explanation
The shop was insured against natural causes, but the fire came from cooking, which was not an insured cause.