Page 70 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Rupesh Roshan Singh, Lovely Professional University
Unit 5: Principles of Insurance

Unit 5: Principles of Insurance Notes

CONTENTS
Objectives
Introduction

5.1 Principles of Utmost Good Faith
5.1.1 What is a material fact?
5.1.2 Breaches of Utmost Good Faith

5.2 Principle of Insurable Interest
5.2.1 How is Insurable Interest Created?
5.2.2 When Should Insurable Interest Exist
5.3 Principle of Indemnity
5.3.1 How is Indemnity Provided?

5.4 Principle of Subrogation
5.5 Principle of Contribution
5.6 Principles of Proximate Cause

5.6.1 Need to Identify Proximate Cause
5.6.2 The Meaning of Proximate Cause
5.7 Summary
5.8 Keywords
5.9 Review Questions

5.10 Further Readings

Objectives

After studying this unit, you will be able to:

Explain the principle of utmost good faith
Discuss the principle of insurable interest
Describe the principle of indemnity
Define the principle of subrogation
Explain the principle of contribution

Describe the principle of causa proxima (nearest cause)

Introduction

In this unit, we will cover various aspect of General Insurance such as Principles of Utmost Good
Faith material fact, Principle of Insurable Interest and Principle of Indemnity.

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