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Which principle of insurance is highlighted in the following statements? a. insured should take the reasonable steps to minimise the loss b. insured is entitled to recover the loss suffered by him, up the limit of policy amount?
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Which principle of insurance is highlighted in the following statement...
Principles of Insurance
Insurance is a mechanism that provides financial protection against uncertain events. The concept of insurance is based on certain principles that govern the functioning of insurance contracts. These principles help in creating a fair and equitable relationship between the insurer and the insured.
Two important principles of insurance are highlighted in the following statements:
Principle of Utmost Good Faith
The principle of utmost good faith requires both the insurer and the insured to disclose all material facts related to the subject matter of insurance. The insured should take the reasonable steps to minimise the loss, and the insurer should provide accurate and complete information about the policy terms and conditions.
In the given statement, the insured is expected to take reasonable steps to minimise the loss. This means that the insured should not act recklessly or negligently, which may cause or increase the loss. For example, if a person has insured his car, he should take proper care of the vehicle, follow traffic rules, and park the car in a safe place to avoid theft or damage.
If the insured fails to take reasonable steps to minimise the loss, the insurer may reject the claim or reduce the claim amount. The principle of utmost good faith ensures that both parties act honestly and fairly in their dealings.
Principle of Indemnity
The principle of indemnity states that the insured is entitled to recover the loss suffered by him, up to the limit of the policy amount. This means that the insurer is liable to compensate the insured for the actual loss suffered by him, and not more than that.
In the given statement, the insured is entitled to recover the loss suffered by him, up to the limit of the policy amount. This means that if the insured suffers a loss that is covered under the policy, he can claim compensation from the insurer, but only up to the limit of the policy amount. For example, if a person has insured his house for Rs. 50 lakhs, and the house is damaged due to a fire, he can claim up to Rs. 50 lakhs from the insurer, but not more than that.
The principle of indemnity ensures that the insured is not overcompensated for his loss and does not make a profit out of the insurance contract. It also ensures that the insurer does not suffer any undue loss due to the insured's claim.
Insurance is a mechanism that provides financial protection against uncertain events. The concept of insurance is based on certain principles that govern the functioning of insurance contracts. These principles help in creating a fair and equitable relationship between the insurer and the insured.
Two important principles of insurance are highlighted in the following statements:
Principle of Utmost Good Faith
The principle of utmost good faith requires both the insurer and the insured to disclose all material facts related to the subject matter of insurance. The insured should take the reasonable steps to minimise the loss, and the insurer should provide accurate and complete information about the policy terms and conditions.
In the given statement, the insured is expected to take reasonable steps to minimise the loss. This means that the insured should not act recklessly or negligently, which may cause or increase the loss. For example, if a person has insured his car, he should take proper care of the vehicle, follow traffic rules, and park the car in a safe place to avoid theft or damage.
If the insured fails to take reasonable steps to minimise the loss, the insurer may reject the claim or reduce the claim amount. The principle of utmost good faith ensures that both parties act honestly and fairly in their dealings.
Principle of Indemnity
The principle of indemnity states that the insured is entitled to recover the loss suffered by him, up to the limit of the policy amount. This means that the insurer is liable to compensate the insured for the actual loss suffered by him, and not more than that.
In the given statement, the insured is entitled to recover the loss suffered by him, up to the limit of the policy amount. This means that if the insured suffers a loss that is covered under the policy, he can claim compensation from the insurer, but only up to the limit of the policy amount. For example, if a person has insured his house for Rs. 50 lakhs, and the house is damaged due to a fire, he can claim up to Rs. 50 lakhs from the insurer, but not more than that.
The principle of indemnity ensures that the insured is not overcompensated for his loss and does not make a profit out of the insurance contract. It also ensures that the insurer does not suffer any undue loss due to the insured's claim.
Community Answer
Which principle of insurance is highlighted in the following statement...
A mitigation
b indemnity
b indemnity
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Which principle of insurance is highlighted in the following statements? a. insured should take the reasonable steps to minimise the loss b. insured is entitled to recover the loss suffered by him, up the limit of policy amount?
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Which principle of insurance is highlighted in the following statements? a. insured should take the reasonable steps to minimise the loss b. insured is entitled to recover the loss suffered by him, up the limit of policy amount? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Which principle of insurance is highlighted in the following statements? a. insured should take the reasonable steps to minimise the loss b. insured is entitled to recover the loss suffered by him, up the limit of policy amount? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which principle of insurance is highlighted in the following statements? a. insured should take the reasonable steps to minimise the loss b. insured is entitled to recover the loss suffered by him, up the limit of policy amount?.
Which principle of insurance is highlighted in the following statements? a. insured should take the reasonable steps to minimise the loss b. insured is entitled to recover the loss suffered by him, up the limit of policy amount? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Which principle of insurance is highlighted in the following statements? a. insured should take the reasonable steps to minimise the loss b. insured is entitled to recover the loss suffered by him, up the limit of policy amount? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which principle of insurance is highlighted in the following statements? a. insured should take the reasonable steps to minimise the loss b. insured is entitled to recover the loss suffered by him, up the limit of policy amount?.
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