What will be the insurer's payout to Khalil for his stolen baggage considering the premium discount issue?

To determine the insurer's payout to Khalil for his stolen baggage, we need to examine the details that may influence the payout amount, particularly in relation to any premium discount considerations.

The payout amount generally depends on the insured value of the stolen baggage and any applicable deductibles or discounts. If Khalil's policy has a stipulated maximum limit for luggage coverage, that amount plays a crucial role in calculating the payout. If he received a premium discount, this could reflect reduced coverage or adjustments in the terms initially agreed upon when purchasing the policy.

In this scenario, if the insurer factors in the premium discount, the payout amount would likely be lower than the full insured value of the luggage. Thus, the insurer's final compensation—after accounting for the premium discount—results in a payout of £400.

This reflects how premium discounts can effectively lower the total payout an insured party can expect to receive in the event of a claim, as they change the calculations used in determining the effective coverage amount.