'A' insured his house against fire with "X" Company for ₹ 60,000 and with "Y" Company for ₹ 1,00,000. Fire broke out in the building and a loss of ₹ 50,000 occurs. Whether 'A' file a suit against both the insurers or aga

In this scenario, 'A' has insured his house with two different companies for the same risk (fire), which is known as double insurance. The principle of contribution applies here. The total loss incurred is ₹ 50,000. The sum insured with Company X = ₹ 60,000 The sum insured with Company Y = ₹ 1,00,000 Total sum insured by all insurers = ₹ 60,000 + ₹ 1,00,000 = ₹ 1,60,000 According to the principle of contribution, the insured ('A') can claim the full amount of loss (up to the sum insured) from any one insurer, or partially from both. However, the insured cannot recover more than the actual loss suffered. If 'A' claims from one insurer, that insurer has the right to demand contribution from the other insurer(s) to share the loss proportionately. Liability of each insurer: The formula for contribution is: (Sum Insured with an Insurer / Total Sum Insured by all Insurers) × Actual Loss. Liability of Company X: = (₹ 60,000 / ₹ 1,60,000) × ₹ 50,000 = 0.375 × ₹ 50,000 = ₹ 18,750 Liability of Company Y: = (₹ 1,00,000 / ₹ 1,60,000) × ₹ 50,000 = 0.625 × ₹ 50,000 = ₹ 31,250 Thus, the total claim payable by both companies is ₹ 18,750 + ₹ 31,250 = ₹ 50,000, which equals the actual loss. Regarding filing a suit, 'A' may file a suit against one insurer for the full loss (₹ 50,000), and that insurer would then seek contribution from the other. Alternatively, 'A' could file against both for their proportionate shares. The answer states: "The insured may claim from one insurer, who can recover contribution from the other insurer." This implies 'A' can choose one.