Page 226 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

behind this is that the party who drafts the
contract, must suffer, in case of any doubt or
ambiguity.

g. Amount of claim payable - The amount of claims
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. A contract of
fire insurance tries to indemnify the insured in case of a
loss, and brings him back to the nearest position possible
where he was before the loss.

The insurers will pay for (i) If the property is damaged,
the amount of such damage. (ii) If the property is
destroyed, the value of such property, subject to the sum
insured, or (iii) the insurers may reinstate or replace such
property or any part of it, at their option.

The extent of indemnity is thus limited to :
(i) The value of the subject matter of the insurance

affected. The value is calculated taking into account
the following factors : (a) the value at the time of
loss (b) value at the place of loss (c) the real or

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