Question

Which of the following is an example of the Principle of Indemnity in action?

a.

The insurer pays the insured more than the loss they suffered.

b.

The insurer repairs a damaged item.

c.

The insured receives the full sum insured even if it exceeds the loss.

d.

The insurer compensates the insured to restore their financial position.

Posted under IC38 Life Insurance Agent Exam

Answer: (d).The insurer compensates the insured to restore their financial position. Explanation:The Principle of Indemnity ensures that the insured is compensated to restore their financial position.

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Q. Which of the following is an example of the Principle of Indemnity in action?
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