Question

A building is insured for 80% of its value. The annual premium at 70 paise percent amounts to ₹ 2,800.  Fire damaged the building to the extent of 60% of its value. How much amount for damage can: be claimed under the policy? 

Answer 1

Let x be the property value 

∴ Policy value = 0.8 x 

Rate of premium = 70 paise percent 

`therefore 0.7/100 xx 0.8 "x" = 2800`

x = `(2800 xx 100)/(0.7 xx 0.8)`

= ₹ 500000 

∴ Policy value = 0.8 x 5,00,000 

= 4.00.000 

Loss = 60 %

`= 60/100 xx 500000`

= 300000

Claim = `"insured value"/"property value" xx "loss"`

`= 400000/500000 xx 300000`

= 240000

∴ Claim under the policy is  ₹ 2,40,000