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Write a short note on “Double insurance”.

Solution

Double insurance: Where the assured insures the same risk with two or more different insurers, and the total sum insured is more than the value of the subject matter, it is said that the assured has over-insured himself by double insurance example, if a person has a house worth Rs. 50,000 and he gets it insured with two insurance companies for Rs. 40,000 each he will be said to have effected a double insurance. But this does not mean that he can recover Rs. 80,000 in case the house is destroyed by fire. He can only recover the amount of actual loss. The benefit of double insurance is that assured can recover the amount from him in any order he likes.

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