General Insurance PrinciplesQuestion 195 of 315
The principle of indemnity is intended to:
a.Allow the insured to profit from a covered loss
b.Pay the insured a stated face amount regardless of actual loss
c.Permit double recovery from two separate policies
d.Restore the insured to the financial position held just before the loss, but no better
Explanation
Indemnity means making the insured whole, no more and no less. It governs property and most health insurance. Life insurance is a valued contract that pays a stated face amount because human life cannot be measured in dollars.
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Related questions on this topic
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- Subrogation is BEST defined as:
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Sen Lin, PrepPass Founder · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)