Page 40 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

this condition is hardly practiced, it is
inserted for protection against unreasonable
or exaggerated claims.

(vii) Pro-rata 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.

(viii) 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 loss. Rate able

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