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JAMB Commerce 2020 Paper

Question : 6

Total: 40

Solution:

Concept:

Under the average clause, the insurer pays only the proportion of the loss that the sum insured bears to the actual value of the property.

Explanation:

Property value = ₦1000

Amount insured = ₦800

Actual loss = ₦400

Claim amount =

\frac{\text{Amount insured}}{\text{Property value}} \times \text{Loss}

Claim amount =

\frac{800}{1000} \times 400

Claim amount =

0.8 \times 400 = 320

So the insurance company pays ₦320.

Answer:

₦320, i.e. option B.

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