Page 213 - Fire Insurance Ebook IC 57

The Insurance Times

Amount of claim payable

n The amount of claim payable under the fire policy is governed by
the legal principle of indemnity and is also subject to the terms
and conditions of the insurance contract.

n A contract of fire insurance is a contract of indemnity.
n The insurers try to place the insured in the same position as he

was immediately before the fire.
n The insureds should not make profit out of loss.

Insurers will pay for

(a) if the property is damaged, the amount of such damage.
(b) if the property is destroyed, the value of such property, subject

to the sum insured, or
(c) the insurers may, at their option, reinstate or replace such property

or any part thereof.

The extent of indemnity is therefore subject to two main
limitations

(a) Value of the subject matter of the insurance affected. The value is
calculated taking into account the following factors :
(i) The value at the time of loss ;
(ii) The value at the place of loss ;
(iii) The real or intrinsic value excluding any sentimental value ;
(iv) Depreciation or betterment;
(v) Prospective profit or other consequential and indirect losses
are excluded.

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