Advertisements
Advertisements
Question
Distinguish between the following:
Fire Insurance and Marine Insurance
Solution
Differences between Fire Insurance and Marine Insurance
| Sr. No. | Point of Distinction |
Fire Insurance | Marine Insurance |
| 1 | Meaning | A contract in which insurer promises to pay compensation to insured if something happens to the subject matter due to fire or related events. |
A contract whereby the insurance company undertakes to pay compensation to the insured in case of loss to him due to dangers (perils) of the sea. |
| 2 | Who takes it | It can be taken by individuals for their properties or by businessmen for their goods, properties business liabilities, etc. |
It can be taken by exporters, importers and shipping companies. |
| 3 | Subject Matter | In Fire Insurance, the goods and assets or property of the insured is the subject matter. |
In Marine Insurance, goods in ship, cargo and freight is the subject matter. |
| 4 | Insurable Interest |
It must exist both at the time of contract and also at the time of loss. |
It must exist at the time of loss. |
| 5 | Period | It is generally for a short period like one year. |
It is generally for a short period and may range from one month to a year. Normally, it does not exceed one year. |
| 6 | Compensation | It is paid only if there is loss due to fire during the term of policy |
It is paid only if there is a loss causing event during the term of the policy. |
APPEARS IN
RELATED QUESTIONS
The Principle of indemnity is not applicable to ____________
a. life insurance
b. marine insurance
c. fire insurance.
Choose the correct answer for the following:
Which of the following is not applicable in life insurance contract?
Explain briefly the principles of insurance with suitable examples?
A shop is valued at ₹3,60,000 for 75% of its value. If the rate of premium is 0.9%, find the premium paid by the owner of the shop. Also, find the agents commission if the agent gets commission at 15% of the premium.
A cargo of rice was insured at 0.625% to cover 80% of its value. The premium paid was ₹5,250. If the price of rice is ₹21 per kg, find the quantity of rice (in kg) in the cargo.
A property worth ₹4,00,000 is insured with three companies: A, B, and C. The amounts insured with these companies are ₹1,60,000, ₹1,00,000 and ₹1,40,000 respectively. Find the amount recoverable from each company in the event of a loss to the extent of ₹9,000.
A shop and a godown worth ₹1,00,000 and ₹2,00,000 respectively were insured through an agent who was paid 12% of the total premium. If the shop was insured for 80% and the godown for 60% of their respective values, find the agent's commission, given that the rate of premium was 0.80% less 20%.
The rate of premium on a policy of ₹ 1,00,000 is ₹ 56 per thousand per annum. A rebate of ₹ 0.75 per thousand is permitted if the premium is paid annually. Find the net amount of premium payable if the policyholder pays the premium annually.
Fill in the blank :
An installment of money paid for insurance is called __________.
Fill in the blank :
General insurance covers all risks except __________.
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 :
15,000 articles costing ₹200 per dozen were insured against fire for ₹1,00,000. If 20 % of the articles were burnt completely and 2400 of other articles were damaged to the extent of 80% of their value, find the amount that can be claimed under the policy.
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 cargo of grain is insured at `(3/4)`% to cover 70% of its value. ₹1,008 is the amount of premium paid. If the grain is worth ₹12 per kg, how many kg of the grain did the cargo contain?
Solve the following :
A godown valued at ₹80,000 contained stock worth ₹4,80,000. Both were insured against fire. Godown for ₹50,000 and stock for 80% of its value. A part of stock worth ₹60,000 was completely destroyed and the rest was reduced to 60% of its value. The amount of damage to the godown is ₹40,000. Find the amount that can be claimed under the policy.
State whether the following statement is True or False:
Premium is the amount paid to the insurance company every month
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`
