What are principles of insurance?

Question

Accepted Answer

Principles of insurance are fundamental concepts that guide the insurance industry.

Utmost good faith: Both parties must disclose all relevant information.
Insurable interest: The insured must have a financial interest in the insured item.
Indemnity: The insured should be compensated for the actual loss suffered.
Contribution: If multiple policies cover the same risk, each insurer shares the loss.
Subrogation: The insurer can take legal action against third parties responsible for the loss.
Proximate cause: The insurance covers losses caused by the insured peril.
Mitigation: The insured must take reasonable steps to minimize the loss.
Loss minimization: The insurer should take steps to minimize the loss after the occurrence.

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