Rishabh insured his factory for ₹ 5 lakh against fire. Due to fire, – InterviewSolution

1.	Rishabh insured his factory for ₹ 5 lakh against fire. Due to fire, he suffered a loss of ₹ 2 lakh. How much amount he can recover from the insurance company ? Why ?
Answer» Rishabh can recover ₹ 2 lakh from the insurance company (not the policy amount, that is, ₹ 5 lakh) since he has suffered a loss of ₹ 2 lakh only. The purpose of insurance is to compensate for loss and not to earn profit. (Principle of indemnity)

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