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A person gets his house (worth RS. 12,00,000) insured from three insurance companies, i.e., A: Rs. 2,00,000, B: Rs. 4,00,000, C: Rs. 6,00,000. At the time of incurrence of loss, the compensation will be paid by insurance companies in the ratio of 1: 2: 3. Identify the principle being referred here.
- a)Principle of Contribution
- b)Principle of Mitigation of loss
- c)Principle of Proximate Cause
- d)Principle of Mitigation cause
Correct answer is option 'A'. Can you explain this answer?
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A person gets his house (worth RS. 12,00,000) insured from three insur...
The principle being referred to here is the principle of contribution.
The principle of contribution is a legal principle that applies when multiple parties are jointly liable for a loss or damage. It states that each party is responsible for contributing to the loss or damage in proportion to their degree of fault or liability.
In the scenario described, the person has insured their house with three insurance companies, and each company has agreed to cover a certain amount of the total value of the house. If the house is damaged and the person incurs a loss, the insurance companies will pay the compensation in the ratio of 1:2:3, which means that insurance company A will pay 1/6 of the total loss, insurance company B will pay 2/6 of the total loss, and insurance company C will pay 3/6 of the total loss. This allocation of the loss is based on the principle of contribution, as each insurance company is contributing to the loss in proportion to the amount of coverage it has provided.
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A person gets his house (worth RS. 12,00,000) insured from three insur...
Principle of Contribution
The principle being referred to in this scenario is the Principle of Contribution. This principle is applicable when an insured person obtains multiple insurance policies to cover the same risk, and it ensures that each insurer contributes proportionately towards the loss or damage suffered by the insured.
In this case, the insured person has obtained three insurance policies from companies A, B, and C for his house, which is worth Rs. 12,00,000. The insurance coverage provided by each company is as follows:
- Company A: Rs. 2,00,000
- Company B: Rs. 4,00,000
- Company C: Rs. 6,00,000
According to the terms of the insurance policies, in the event of a loss or damage to the insured house, the compensation will be paid by the insurance companies in the ratio of 1:2:3.
This means that if a loss occurs, Company A will contribute 1 part, Company B will contribute 2 parts, and Company C will contribute 3 parts towards the compensation.
For example, if the total loss suffered by the insured is Rs. 6,00,000, Company A will contribute Rs. 1,00,000 (1/6th of the total loss), Company B will contribute Rs. 2,00,000 (2/6th of the total loss), and Company C will contribute Rs. 3,00,000 (3/6th of the total loss).
The Principle of Contribution ensures that the insured does not receive a total compensation amount exceeding the actual loss suffered. It prevents the insured from making a profit from multiple insurance policies covering the same risk.
In this case, if the insured person only had one insurance policy with Company C for the full value of the house (Rs. 12,00,000), he would have received a compensation of Rs. 6,00,000 (as per the ratio of 1:3). However, due to the Principle of Contribution, the insured person will receive a proportionate compensation from each insurance company based on their coverage amount.
Therefore, the Principle of Contribution is being referred to in this scenario as it determines the proportionate contribution of each insurance company towards the compensation for the loss or damage suffered by the insured.
The principle being referred to in this scenario is the Principle of Contribution. This principle is applicable when an insured person obtains multiple insurance policies to cover the same risk, and it ensures that each insurer contributes proportionately towards the loss or damage suffered by the insured.
In this case, the insured person has obtained three insurance policies from companies A, B, and C for his house, which is worth Rs. 12,00,000. The insurance coverage provided by each company is as follows:
- Company A: Rs. 2,00,000
- Company B: Rs. 4,00,000
- Company C: Rs. 6,00,000
According to the terms of the insurance policies, in the event of a loss or damage to the insured house, the compensation will be paid by the insurance companies in the ratio of 1:2:3.
This means that if a loss occurs, Company A will contribute 1 part, Company B will contribute 2 parts, and Company C will contribute 3 parts towards the compensation.
For example, if the total loss suffered by the insured is Rs. 6,00,000, Company A will contribute Rs. 1,00,000 (1/6th of the total loss), Company B will contribute Rs. 2,00,000 (2/6th of the total loss), and Company C will contribute Rs. 3,00,000 (3/6th of the total loss).
The Principle of Contribution ensures that the insured does not receive a total compensation amount exceeding the actual loss suffered. It prevents the insured from making a profit from multiple insurance policies covering the same risk.
In this case, if the insured person only had one insurance policy with Company C for the full value of the house (Rs. 12,00,000), he would have received a compensation of Rs. 6,00,000 (as per the ratio of 1:3). However, due to the Principle of Contribution, the insured person will receive a proportionate compensation from each insurance company based on their coverage amount.
Therefore, the Principle of Contribution is being referred to in this scenario as it determines the proportionate contribution of each insurance company towards the compensation for the loss or damage suffered by the insured.
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A person gets his house (worth RS. 12,00,000) insured from three insurance companies, i.e., A: Rs. 2,00,000, B: Rs. 4,00,000, C: Rs. 6,00,000. At the time of incurrence of loss, the compensation will be paid by insurance companies in the ratio of 1: 2: 3. Identify the principle being referred here.a)Principle of Contributionb)Principle of Mitigation of lossc)Principle of Proximate Caused)Principle of Mitigation causeCorrect answer is option 'A'. Can you explain this answer?
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A person gets his house (worth RS. 12,00,000) insured from three insurance companies, i.e., A: Rs. 2,00,000, B: Rs. 4,00,000, C: Rs. 6,00,000. At the time of incurrence of loss, the compensation will be paid by insurance companies in the ratio of 1: 2: 3. Identify the principle being referred here.a)Principle of Contributionb)Principle of Mitigation of lossc)Principle of Proximate Caused)Principle of Mitigation causeCorrect answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A person gets his house (worth RS. 12,00,000) insured from three insurance companies, i.e., A: Rs. 2,00,000, B: Rs. 4,00,000, C: Rs. 6,00,000. At the time of incurrence of loss, the compensation will be paid by insurance companies in the ratio of 1: 2: 3. Identify the principle being referred here.a)Principle of Contributionb)Principle of Mitigation of lossc)Principle of Proximate Caused)Principle of Mitigation causeCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A person gets his house (worth RS. 12,00,000) insured from three insurance companies, i.e., A: Rs. 2,00,000, B: Rs. 4,00,000, C: Rs. 6,00,000. At the time of incurrence of loss, the compensation will be paid by insurance companies in the ratio of 1: 2: 3. Identify the principle being referred here.a)Principle of Contributionb)Principle of Mitigation of lossc)Principle of Proximate Caused)Principle of Mitigation causeCorrect answer is option 'A'. Can you explain this answer?.
A person gets his house (worth RS. 12,00,000) insured from three insurance companies, i.e., A: Rs. 2,00,000, B: Rs. 4,00,000, C: Rs. 6,00,000. At the time of incurrence of loss, the compensation will be paid by insurance companies in the ratio of 1: 2: 3. Identify the principle being referred here.a)Principle of Contributionb)Principle of Mitigation of lossc)Principle of Proximate Caused)Principle of Mitigation causeCorrect answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A person gets his house (worth RS. 12,00,000) insured from three insurance companies, i.e., A: Rs. 2,00,000, B: Rs. 4,00,000, C: Rs. 6,00,000. At the time of incurrence of loss, the compensation will be paid by insurance companies in the ratio of 1: 2: 3. Identify the principle being referred here.a)Principle of Contributionb)Principle of Mitigation of lossc)Principle of Proximate Caused)Principle of Mitigation causeCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A person gets his house (worth RS. 12,00,000) insured from three insurance companies, i.e., A: Rs. 2,00,000, B: Rs. 4,00,000, C: Rs. 6,00,000. At the time of incurrence of loss, the compensation will be paid by insurance companies in the ratio of 1: 2: 3. Identify the principle being referred here.a)Principle of Contributionb)Principle of Mitigation of lossc)Principle of Proximate Caused)Principle of Mitigation causeCorrect answer is option 'A'. Can you explain this answer?.
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A person gets his house (worth RS. 12,00,000) insured from three insurance companies, i.e., A: Rs. 2,00,000, B: Rs. 4,00,000, C: Rs. 6,00,000. At the time of incurrence of loss, the compensation will be paid by insurance companies in the ratio of 1: 2: 3. Identify the principle being referred here.a)Principle of Contributionb)Principle of Mitigation of lossc)Principle of Proximate Caused)Principle of Mitigation causeCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for A person gets his house (worth RS. 12,00,000) insured from three insurance companies, i.e., A: Rs. 2,00,000, B: Rs. 4,00,000, C: Rs. 6,00,000. At the time of incurrence of loss, the compensation will be paid by insurance companies in the ratio of 1: 2: 3. Identify the principle being referred here.a)Principle of Contributionb)Principle of Mitigation of lossc)Principle of Proximate Caused)Principle of Mitigation causeCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of A person gets his house (worth RS. 12,00,000) insured from three insurance companies, i.e., A: Rs. 2,00,000, B: Rs. 4,00,000, C: Rs. 6,00,000. At the time of incurrence of loss, the compensation will be paid by insurance companies in the ratio of 1: 2: 3. Identify the principle being referred here.a)Principle of Contributionb)Principle of Mitigation of lossc)Principle of Proximate Caused)Principle of Mitigation causeCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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