Advertisements
Advertisements
Question
A car valued at ₹8,00,000 is insured for ₹5,00,000. The rate of premium is 5% less 20%. How much will the owner bear including the premium if value of the car is reduced to 60 % of its original value.
Solution
Given, Value of the car (property value)= ₹8,00,000 Policy value = ₹5,00,000
Rate of premium is 5% less 20%
i.e., 5% 20% of 5% = 5% - 1% = 4%
∴ Amount of perimum = 4% of policy value
= `(4)/(100) xx 5,00,000`
= ₹20,000
Value of car is reduced to 60% of its original value.
∴ Reduced value = 60% of original value
= `(60)/(100) xx 8,00,000`
₹ 4,80,000
∴ Loss = Original Value of car – Reduced value of car
= 8,00,000 – 4,80,000
= ₹3,20,000
Claim = `"Policy value"/"Property value" xx "Loss"`
∴ Claim = `(5,00,000)/(8,00,000) xx 3,20,000`
= ₹2,00,000
∴ Actual loss borne by the owner
= Loss – Claim + Premium
= 3,20,000 – 2,00,000 + 20,000
= ₹1,40,000
∴ Loss borne by the owner is ₹1,40,000.
APPEARS IN
RELATED QUESTIONS
Define Fire Insurance.
State Whether the Following Statement Are True Or False (Give Reason)
Principles of utmost good faith is only applicable to life insurance contract.
Answer the following question:
Define insurance. Explain the various principles of insurance.
Choose the correct answer for the following:
Which of the following is not a function of insurance?
Find the premium on a property worth ₹ 25,00,000 at 3% if (i) the property is fully insured, (ii) the property is insured for 80% of its value.
Choose the correct alternative :
“A contract that pledges payment of an agreed upon amount to the person (or his/ her nominee) on the happening of an event covered against” is technically known as
Insurance companies collect a fixed amount from their customers at a fixed interval of time. This amount is called ______.
Fill in the blank :
An installment of money paid for insurance is called __________.
Fill in the blank :
General insurance covers all risks except __________.
The value of insured property is called ______.
A house valued at ₹ 8,00,000 is insured at 75% of its value. If the rate of premium is 0.80%, find the premium paid by the owner of the house. If agent’s commission is 9% of the premium, find agent’s commission.
Solve the following :
A factory building is insured for `(5/6)^"th"` of its value at a rate of premium of 2.50%. If the agent is paid a commission of ₹2,812.50, which is 7.5% of the premium, find the value of the building.
Solve the following :
For what amount should a cargo worth ₹25,350 be insured so that in the event of total loss, its value as well as the cost of insurance may be recovered when the rate of premium is 2.5 %.
Solve the following :
A person holding a life policy of ₹1,20,000 for a term of 25 years wants to discontinue after paying premium for 8 years at the rate of ₹58 per thousand p. a. Find the amount of paid up value he will receive on the policy. Find the amount he will receive if the surrender value granted is 35% of the premiums paid, excluding the first year’s premium.
State whether the following statement is True or False:
The value of insured property is called policy value
Property value = ₹ 12,50,000
Rate of premium, r = ₹ 3%
If property is 80% insured
Policy value = 80% of its property value
= `square/100 xx 12,50,000`
= ₹ 10,00,000
Premium = `square/100 xx 10,00,000`
= ₹ `square`
