General Insurance PrinciplesQuestion 195 of 315
The principle of indemnity is intended to:
a.Pay the insured a stated face amount regardless of actual loss
b.Allow the insured to profit from a covered loss
c.Restore the insured to the financial position held just before the loss, but no better
d.Permit double recovery from two separate policies
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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