Question

discuss the various principles of insurence in brief
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Answer 1

Answer:

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Answer 2

Answer:

What is Insurance?

Represented in a form of policy, Insurance is a contract in which the individual or an entity gets the financial protection in other words reimbursement from the insurance company for the damage (big or small) caused to their property.

The insurer and the insured enter a legal contract for the insurance called the insurance policy that provides financial security from the future uncertainties.

In simple words, insurance is a contract, a legal agreement between two parties, i.e., the individual named insured and the insurance company called insurer. In this agreement, the insurer promises to help with the losses of the insured on the happening contingency. The insured, on the other hand, pays a premium in return for the promise made by the insurer.

The contract of insurance between an insurer and insured is based on certain principles, lets us know the principles of insurance in detail.

Principles Of Insurance

The concept of insurance is risk distribution among a group of people. Hence cooperation becomes the basic principle of insurance.

To ensure the proper functioning of an insurance contract, the insurer and the insured have to uphold the 7 principles of Insurances mentioned below:

Utmost Good Faith

Proximate Cause

Insurable Interest

Indemnity

Subrogation

Contribution

Loss Minimization

Let us understand each principle of insurance with an example.