Question

A stock worth ₹ 7,00,000 was insured for ₹ 4,50,000. Fire burnt stock worth ₹ 3,00,000 completely and damaged the remaining stock to the extent of 75 % of its value. What amount can be claimed under the policy?

Answer 1

Given, Stock (property value) = ₹ 7,00,000

Policy value = ₹ 4,50,000

Now, stock worth ₹ 3,00,000 were burnt completely due to fire.

Remaining stock = Stock value – Burnt stock

= 7,00,000 – 3,00,000

= ₹ 4,00,000

Remaining stock was damaged to 75% of its value.

∴ Damaged amount = 75% of Value

= `75/100 xx 4,00,000`

= ₹ 3,00,000

∴  Total loss = Burnt stock + Damaged amount

= 3,00,000 + 3,00,000

= 6,00,000

Claim = `"Policy value"/"Property" xx "Total loss"`

∴ Claim = `(4,50,000)/(7,00,000) xx 6,00,000 `

= ₹ 3,85,714.30

∴ Sum of ₹ 3,85,714.30 can be claimed under the policy.