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Primary and excess insurance

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Angelique has a small plane. Its replacement cost is £150,000. She wants to insure it in a local company (Insurer A), as she owns some stocks in this company. However, this insurer covers planes with a maximum limit of £100,000. Her insurance broker advises her to place another £50,000 with a second company (Insurer B). The broker also mentions that she has three options of provisions to use: pro rata liability, contribution by equal shares, and primary and excess insurance. Since she can make some profits on her stocks, she opts for the cheapest solution from Insurer A. How would you advise her, taking into account partial loss of £75,000? Explain your answer

Reference no: EM132665974

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