Law of Insurance Question and Answer – Double Insurance

Question

Jean Jipapa insured his ship against any losses while lying at Mombasa port for a sum of shillings 10 million with BADCE Insurance Company Limited. He further insured the same ship with Deep See Insurance Company Limited for a similar amount.
Subsequently, the port caught fire and the ship was badly damaged. The estimated cost of repair of the ship is shillings 5 million.
Jean Jipapa has lodged a claim for compensation from both insurance companies.
Explain the legal principles in the case and advise Jean Jipapa.

Answer

• The legal principle is double insurance.

• This is when the insured takes up insurance policy for the same subject matter and same risk with two or more insurers.
• In the event of loss he can either get compensation from one insurer or  from both of them but on a prorata basis a total amount not exceeding the value of the loss because contract of insurance are contracts of indemnity.
• In this case Jipapa can either get sh. 5 million from either of the companies or get sh. 2.5 m from each of them.