Principles Of Insurance

Question 1

List all principles of insurance

Answer 1

Utmost good faith, 
insurable interest, 
subrogation, 
indemnity 
Condemnity

Question 2

Utmost good faith

Answer 2

Utmost Good Faith: A person is obliged to answer all questions truthfully when completing the proposal form and disclose all relevant facts

Question 3

Insurable interest

Answer 3

Insurable Interest: You must gain (financially) by its existence and suffer (financially) by its loss

Question 4

Indemnity

Answer 4

You cannot make a profit from a loss. The conpensation you receive will on be equal to the current value of the item

Question 5

Subrogation

Answer 5

Subrogation: The insurance company has the right to seek compensation from the party that caused the loss/damage and take the damaged item for scrap value

Question 6

Contribution

Answer 6

Contribution: If you insure an item with more than one insurance company, each insurance company will contribute/divide the compensation.