WAEC Commerce 2007 Question 41

Question 41

Insurance

Use 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.
The amount of D60,000 quoted represents

A.premium
B.sum insured
C.contribution
D.compensation.

Show the answer and explanation

Answer: B (sum insured)

Explanation

D60,000 is the value for which the shop was insured: the sum insured.