Question

Stocks in a shop and godown worth ₹75,000 and ₹1,30,000 respectively were insured through an agent who receives 15% of premium as commission. If the shop was insured for 80% and godown for 60% of the value, find the amount of agent’s commission when the premium was 0.80% less 20%. If the entire stock in the shop and 20% stock in the godown is destroyed by fire, find the amount that can be claimed under the policy.

Answer 1

Rate of premium = 0.80% less 20%

= 0.80 – 20% × 0.80

= 0.80 – 0.16

= 0.64%

∵ Property value = ₹75,000

∴ Policy value = 80% × 75,000 = ₹60,000

Premium = 0.64% × 60,000 = ₹384

Loss = ₹ 75,000

Claim = `"Policy value"/"Property value"xxLoss`

`60000/75000 xx 75000`

₹60,000

For Godown 

Property value = ₹1,30,000

Policy value = 60% × 1,30,000 = ₹78,000

Premium = 0.64% × 78,000 = ₹499.2

Loss = 20% × 1,30,000 = ₹26,000

Claim = `"Policy value"/"Property value"xxLoss`

`78000/130000 xx 26000`

= ₹15,600

Total claim = 16,600 + 60,000 = ₹75,600

∵ Rate of commission = 15%

∴ Agent commission = 15% × [384 + 499.2]

= 15% × 883.2

= ₹132.48