Question

31 Explain the following principles
a) Utmost Good Faith
b) Proximate Cause
C) Subrogation
d) Contribution
e) Mitigation of Loss
Long answer type questions​

Answer 1

Answer:

Utmost Good Faith-The principle of utmost good faith, uberrimae fidei, states that the insurer and the insured must disclose all material facts before the policy inception. 2. Facts which may enhance the level of risk are called material facts. ... This principle applies to both life insurance and general insurance policies.

Proximate Cause-The Principle of Proximate Cause

The Principle of Proximate CauseThe loss of insured property can be caused by more than one incident even in succession to each other. Property may be insured against some but not all causes of loss. ... If the proximate cause is one in which the property is insured against, then the insurer must pay compensation.

Subrogation-the Subrogation Principle in Insurance means; when insurer (insurance company) pays full compensation for any insured loss (of insured property), the insurer (insurance company) holds the legal right (claim) of the insured property.

Contribution-This is the principle of contribution. Each policy you have on the same subject matter pays their proportion of the loss incurred by the policyholder. It's an extension of the principle of indemnity that allows proportional responsibility for all insurance coverage on the same subject matter.

Mitigation of Loss-Mitigation means keeping your losses after an accident or injury to a minimum. Reasonableness is the guiding principle. When you claim compensation after an accident you have a duty to mitigate, or keep your losses to a reasonable minimum. Your response to the problems created by the accident must be reasonable.

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