Principles of Insurance Summative

Front

When a policyholder has a legitimate interest in the preservation of the insured item or person, affirming that they would suffer a financial loss if a loss occurs.

This refers to?

Back

Insurable interest

Front

The principle wherein an insurance policy reimburses the insured for actual losses incurred, ensuring they are restored to their financial position prior to the loss is?

Back

INDEMNITY

Front

This is the right of insurers to claim proportionate reimbursement from other insurers when multiple policies cover the same risk, ensuring fair compensation without profit.

Back

Contribution

Front

This is the process allowing an insurer to pursue recovery from a third party responsible for a loss after they have compensated the insured, preventing unjust enrichment.

Back

Subrogation

Front

This refers to actions taken by the insured to reduce the severity or impact of a loss, demonstrating responsibility and care in managing insured risks.

Back

Loss minimization

Front

This is the primary, direct cause of a loss, establishing a link between the insured event and the loss incurred, which must be shown for coverage to apply.

Back

Proximate cause

Front

This requires both parties (the insurer and insured) to disclose all relevant information honestly, ensuring fairness in the insurance agreement.

Back

Utmost good faith, or 'uberrima fides,'

Front

Thiss involves gathering multiple insurance policies to spread the financial risk among many insured parties, minimizing the impact of individual losses on the insurer.

Back

Pooling of risk

Front

The insurance company will ONLY insure these types of RISK

Back

INSURABLE RISKS

Front

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helps reduce the risk of running a business

Back

Insurance