Question

explain briefly the following principles of insurance
a. principle of indemnity
b. principle of subrogation
c. principle of insurable interest​

Answer 1

a) Principal of indemnity

According to the principle of indemnity, the purpose of an insurance contract is to bring back the insured to the same financial position as he or she was before the loss occurred to him or her (because of a mishap).

b) Principal of subrogation :

Once the compensation is paid, the right of ownership of the damaged property passes to the insure.

c) Principal of insurable interest :

According to the principle of insurable interest, the insured must have some interest vested in the object which is being insured by him, in the absence of which the insurance policy is considered as a gamble and the contract will be void.

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