a) Mpho owns a property with a price of P800 000.00. As a result, he purchased property of insurance amounting to P560 000.00. The contracts includes an 80% coinsurance clause.

Required:

i) Determine how much he will be entitled to get from the insurance company if a covered loss of P160 000.00 occurs or if a covered loss of P680 000.00 occurs [6 marks]

ii) What would your answers in part (i) be if the property was insured for P640 000.00 [5 marks]

b) Marco and Sophie are legally married and currently on separation. They both, unknowingly, insured the family property for P400 000.00 and P600 000.00 respectively. Both policies are still live and a covered loss of P180 000.00 has occurred.

Required

Determine how their insurance policies will contribute to the loss using

Pro rata basis [5 marks]

Contribution by equal shares [5 marks]

Primary and excess, assuming that, Marco, the husbands insurer is taken as primary [4 marks]