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Understanding Insurance Customers, Principles of Insurance Video Lecture | Principles of Insurance - B Com

49 videos|51 docs|14 tests

FAQs on Understanding Insurance Customers, Principles of Insurance Video Lecture - Principles of Insurance - B Com

1. What are the principles of insurance?
Ans. The principles of insurance are fundamental guidelines that govern the insurance industry. They include principles such as utmost good faith, insurable interest, proximate cause, indemnity, and subrogation. These principles ensure that insurance contracts are fair, valid, and provide protection to both the insurer and the insured.
2. What is utmost good faith in insurance?
Ans. Utmost good faith is a principle in insurance that requires both the insurer and the insured to disclose all relevant information honestly and accurately. This principle ensures transparency and trust between the parties involved. Failure to adhere to utmost good faith can result in the voiding of the insurance contract or denial of claims.
3. What is insurable interest in insurance?
Ans. Insurable interest is a principle in insurance that states that the insured must have a financial or other interest in the subject matter of the insurance policy. This principle ensures that insurance is not used for speculative purposes and that the insured would suffer a financial loss if the insured event occurs. For example, a person can only insure a property they own, as they have a financial interest in protecting it.
4. What is indemnity in insurance?
Ans. Indemnity is a principle in insurance that ensures that the insured is restored to the same financial position they were in before the insured event occurred. It means that the insurer will compensate the insured for the actual loss suffered, up to the policy limits. Indemnity prevents the insured from making a profit from the insurance policy and promotes the principle of compensation rather than speculation.
5. What is subrogation in insurance?
Ans. Subrogation is a principle in insurance that allows the insurer, after settling a claim, to step into the shoes of the insured and pursue legal action against the party responsible for the loss. This enables the insurer to recover the amount paid in the claim from the negligent party. Subrogation prevents the insured from receiving double compensation and helps insurers to mitigate their losses.
49 videos|51 docs|14 tests
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