Principles of Insurance

• • Insurable Interest - you must own the good you are trying to insure and must be there to suffer by its loss and gain from it being there.
• • Utmost Good Faith - when a person is filling out a proposal form or a claims form, they must answer all questions truthfully. Any important information not questioned also must be filled out.
• • Indemnity - you must not make a profit from an insurance claim. You must be in the same financial position before the loss occurred.
• • Subrogation - after claiming compensation for damaged or stolen property, the rights of the property goes to the insurer. It is not the property of the insured anymore. The insurer can do whatever they please with the property.
• • Contribution - if you have an item insured with two insurance companies and it gets stolen or damaged, the sum of the compensation paid out must equal the value of the item. The two companies should not pay out the total value of the item as the insured will make a profit from an insurance claim, going against indemnity.