The principle of indemnity will prevent:
A)the act of one person from being imputed to another.
B)an insured from collecting more than what he or she has lost.
C)a negligent third party from being held liable for damages if the injured party is insured.
D)a significant amount of loss control activity.
E)an insurer from ever waiving its right to subrogation.

Question

Quizplus · Accepted Answer

The principle of indemnity is based on the concept that an insured should be compensated for their actual losses and not more than that. The purpose is to restore the insured to the same financial position as they were in before the loss without giving them a profit. This is because insurance is not intended to be a source of profit, but rather a means of protection against financial loss. Therefore, the principle of indemnity will prevent an insured from collecting more than what he or she has lost.

The Principle of Indemnity Will Prevent