15 Questions
What is the process by which risk is spread, usually among a large group of people?
Insurance
Who agrees to pay money to or on behalf of the insured on the happening of an event in an insurance contract?
The insurer
What type of insurance involves a contract where the insurer agrees to pay against the actual loss that the insured suffered?
Indemnity Insurance
Which principle of insurance states that the insurance contract must be signed by both parties in absolute good faith or trust?
Utmost good faith
What is the term for when the policyholder can file a claim for a covered loss and becomes a claimant after filing a claim?
Claiming
How are collected premiums used in insurance?
To pay for the claim out of the pool of premiums
What is the principle that obliges all parties to reveal all important information before signing up for an insurance policy?
Principle of Utmost Good Faith
When does a person have insurable interest in an object according to the text?
When the object's physical existence gives him some gain, but non-existence will give him a loss
What is the principle that ensures the amount paid by the insurer to the insured is not more or less than the value of loss?
Principle of Indemnity
What does the Principle of Subrogation enable the insurer to do?
Take over the policyholder's legal right to recover damages
Which principle stipulates that the insured must always try their best to minimize the loss of their insured property?
Principle of Loss Minimization
What does the Principle of Indemnity aim to prevent?
Deliberate damage to an insured item and then claiming insurance
In which principle does a person have insurable interest when the physical existence of the insured object gives some gain, but its non-existence will give a loss?
Principle of Insurable Interest
If more than one policy exists for the same subject matter, what does the Principle of Contribution state?
The insured can only claim compensation to the extent of the actual loss either from all insurers or from one.
What does the Principle of Causa Proxima help insurers assess?
Circumstances surrounding incident and identify most immediate cause.
Learn about the fundamental concept of insurance and how it operates. Understand the process of spreading risk among a group, the role of premiums, filing claims, and the functioning of insurance pools.
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