Question

An insurance contract is based on some basic principles of insurance, which of the following is against those principles?

• A. Principle of utmost good faith
• B. Principle of insurer interest
• C. Principle of causa proxima
• D. Principle of indemnity

Hint:

Key principles of insurance include utmost good faith, causa proxima, and indemnity. Insurer interest is not one of them.

Answer 1

The Correct Option is B

The basic principles of insurance are:
Utmost good faith: Both the insurer and the insured must disclose all material facts honestly.
Causa proxima (Proximate cause): Insurance policies must cover losses that result directly from a specific cause.
Indemnity: Insurance contracts are designed to restore the insured to the same financial position after a loss, without profit.
The Principle of insurer interest is not typically a part of the basic principles of insurance; it relates more to the financial interest of the insurer, which is not a standard principle in insurance contracts.