Basic principles of insurance - SS2 Commerce Past Questions and Answers - page 1
What is the principle that requires both the insurer and the insured to act honestly and disclose all relevant information?
Utmost good faith
Insurable interest
Subrogation
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Which principle states that the insured must have a financial or legal interest in the subject matter of the insurance policy?
Utmost good faith
Insurable interest
Subrogation
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What does the principle of indemnity aim to achieve?
Making a profit from insurance
Restoring the insured to the same financial position
Preventing double compensation
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What does subrogation allow the insurance company to do?
Compensate the insured for a loss
Pursue legal rights against responsible parties
Assess the insurable interest of the insured
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Which principle prevents insurance from being used as a means of speculation or gambling?
Utmost good faith
Insurable interest
Indemnity
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Define the principle of utmost good faith.
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What is the purpose of subrogation in insurance?
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