Question

Mohan intentionally burns the old stock of damaged clothes in his warehouse. Then, he claims the insurance.

1. Which type of insurance would he claim?
2. Give one reason to state why the claim will not be settled.

Answer 1

1. Mohan can Claim Fire Insurance
2. Due to the principle of good faith, Mohan’s claim will be denied because he set the fire on purpose, which goes against the principle of greatest good faith in insurance. Fire insurance only covers losses that happen by mistake or on purpose. It doesn't cover any damage caused intentionally or by malice.