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As insurance aims to cover losses and not to make it profitable to policyholders to make a profit out of an accident the total claim amount cannot be more than the value of the asset.
I agree with Mr. Subhranshu Ganguly answer insurance is aims to return the insured property to it's condition as it's pre the risk or the incident , and would like to add that insurance here is convert to a coinsurance as we have two insurers covering the same risk which is the insured house by fire insurance policy , therfore we should apply the average out of the total sum insurd one lakh and calculate the claim settlement as follows:-
insurer A. share =0.5 lakh
insure B. share =0.5lakh
total amount =1 lakh
Thanking you.
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