The principle of indemnity:
A) is illegal in many countries
B) reduces the occurrence of overstating claims
C) only applies in life and health insurance
D) eliminates insurance fraud

Question

Quizplus · Accepted Answer

The principle of indemnity is a fundamental principle of insurance which aims to restore the insured to the same financial position they were in prior to the loss or damage. It does not eliminate insurance fraud, nor is it only applicable to life and health insurance, and it is not illegal in any country. However, it does help reduce the occurrence of overstating claims as the insurer will only reimburse the actual expenses incurred by the insured.

The Principle of Indemnity