Page 32 - Fire Insurance Ebook IC 57
P. 32

Fire and Consequential Loss Insurance

reinstate, then liability is limited to such sum as
would be required to reinstate the property if the
same could be lawfully reinstated. Though this
condition is hardly practiced, it is inserted for
protection against unreasonable or exaggerated
claims.

(10) This is the pro-rata average condition. If the
         property at the time of claim be collectively of a larger
         value than the sum insured, then the Insured shall act
         his own insurer for the difference, and shall bear a rate
         able proportion of the loss accordingly. If there is under
         insurance, i.e the sum insured is less than the value of
         the property, on the date of loss, the payable amount is
         proportionately reduced. The main objective is to penalize
         under insurance by a corresponding under payment of
         claim. If the fire policy covers various items , then each
         item will be separately subject to average.

(11) This is the contribution condition. In the event of
         more than one policy covering the same property, the
         company will pay only the rate able proportion of the

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