Q.Meena insures goods worth Rs 2,00,000 against fire with two insurers — Rs 2,00,000 with Insurer A and Rs 2,00,000 with Insurer B. The goods are completely destroyed by fire. How much can Meena recover in total, and how will the loss be shared between the two insurers? Name the principles involved.

Taking two policies on the same goods does not let the owner collect twice — the indemnity and contribution principles ensure recovery of the actual loss only, shared between the insurers.

Step 1 — Identify the situation. The same goods (value Rs 2,00,000) are insured against the same risk with two insurers, each for Rs 2,00,000. This is a case of double insurance, and the goods are a total loss.

Step 2 — Apply the Principle of Indemnity. Under indemnity, the insured can recover only the ACTUAL loss suffered, never more. The actual loss is Rs 2,00,000 (the value of the goods destroyed). So Meena can recover only Rs 2,00,000 in total, even though the two sums insured add up to Rs 4,00,000 — insurance must not become a source of profit.

Step 3 — Apply the Principle of Contribution. Because the same risk is covered by more than one insurer, each insurer contributes to the loss in proportion to the sum it has insured. Here both sums insured are equal (Rs 2,00,000 each), so each bears an equal share:

• Insurer A's share = 2,00,000 / (2,00,000 + 2,00,000) x 2,00,000 loss = Rs 1,00,000
• Insurer B's share = 2,00,000 / (2,00,000 + 2,00,000) x 2,00,000 loss = Rs 1,00,000 …