| Legal Principle The insurer agrees to pay no more than the actual amount of the loss. |
| Fact Situation Sunny insures his car worth ` 5 lakh with X, an insurance; company, for its value. He again insures the: same car with Y, another insurance company, on the same terms. There is an accident and the car suffers a total loss. In his separate suits against X and Y, if Sunny recovers ` 5 lakh from X, how much can he recover from Y? |
| Which of the following statements is the most appropriate in relation to the legal principle stated above? |
A) Sunny can recover ` 5 lakh from Y.
B) Sunny cannot recover any amount from Y.v
C) Sunny must pay Y, the ` 5 lakh he received from X.
D) Sunny cannot insure his car with both X and Y at the same time.
Correct Answer: B
Solution :
Sol. The given Legal Principle says that the insurer agrees to pay no more than the actual amount of the loss. In the given Fact Situation Sunny who insures his car worth ` 5 lakh with X and Y insurance companies separately. After accident he recovers actual amount from X, thus he is not eligible to recover it again from company Y.
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