Question 2 [20 marks]

1. Maipelo owns a property valued at P500 000. She purchased P300 000 in property insurance on the building, and the property insurance contract includes an 85 percent coinsurance clause.

1. If a P100 000 covered loss occurs, how much will Maipelo collect from her insurer?
2. If a P350 000 covered loss occurs, how much will Maipelo collect from her insurer?
3. How would your answers to part (a) and part (b) change if, instead of P300 000, Mpho insured the building for P400 000? Show the necessary calculations

[8 marks]

b) Thapelo and Gorata are legally separated. Thapelo insured their vacation home for P280 000. He was not aware that Gorata also purchased coverage and she insured the vacation home for P200 000. While both policies were in force, a P350 000 covered loss occurred. How will the loss be settled if:

(i) pro rata liability is used?

(ii) contribution by equal shares is used?

(iii) primary and excess insurance is used, with Thapelos coverage being deemed primary?

[12 marks]