Akili Mingi owns a house at Muthaiga in Nairobi valued at Sh. 20 million. He insured it against fire with Linda Mali Insurance Co. Ltd and Pokea Insurance Co. Ltd for Sh. 15 million and Sh. 10 million respectively. He also insured his household goods against burglary with Lipa Insurance Co. Ltd. for Sh. 5 million. One night while he was away, burglas broke into the house, stole all household goods and set the house on fire completely destroying it.
Akili Mingi claims the sum assured from the three insurance companies. Advise them.
• This problem is based on the twin principle of contribution and apportion of insurance applicable in circumstances in which a person takes out more than one policy on the same subject matter and risk.
• In this case Akili Mingi has taken out two policies on the house with different insurers and has also insured his household goods for Kshs. 5,000,000 and risk has attached.
• My advise to the insurance companies is that since risk has attached Lipa Insurance Co. Ltd is obliged to pay Akili Mingi Ksh. 5 million for the stolen goods.
• Linda Mali and Pokea Insurance companies are obliged to indemnify Akili Mingi for the loss suffered on the basis of apportionment of liability depending on the sum assured with each of them. Linda Mali Co. Ltd must pay