Tim bought a house early in the year. He acquired a home loan from Second Provincial Bank. At bond inception, the bond agreement stipulated that a policy needs to be taken out for fire and flood damage to the property – the sum insured is R1 250 000. Tim, who forgot about the above stipulation and subsequent effecting of said policy, insures his house at Zoom Insurers, for R1 000 000. A fire recently broke at Tim’s house as a result of load shedding related issues. The damage caused amounts to R200 000. Choose the correct statement.

a. Both the policy effected at Second Provincial Bank, as well as the policy at Zoom will each contribute R100 000 towards payment of the damages.

b. The damage will not be covered unless there is a clear stipulation in the agreement that “each party will pay a proportional share of the claim”.

c. The insurance through Provincial Bank will amount to R111 111 as this policy takes precedence as it was the first policy taken out. The premiums paid to Zoom will have to be repaid.

d. The damages payable by Provincial Bank will amount to R111 111 , and the damages payable by Zoom Bank will amount to R88 889

e. None of the above