MANAGEMENT

Detailed explanation-1: -The Principle of Insurable Interest Insurable interest just means that the subject matter of the contract must provide some financial gain by existing for the insured (or policyholder) and would lead to a financial loss if damaged, destroyed, stolen, or lost.

Detailed explanation-2: -Basic Principles of Insurance In the insurance world there are six basic principles that must be met, ie insurable interest, Utmost good faith, proximate cause, indemnity, subrogation and contribution.

Detailed explanation-3: -One example of subrogation is when an insured driver’s car is totaled through the fault of another driver. The insurance carrier reimburses the covered driver under the terms of the policy and then pursues legal action against the driver at fault.

Detailed explanation-4: -Principle of indemnification is the basis of insurance, providing that a loss payment will replace what is lost, putting the insured back to where it was financially prior to the loss without rewarding or penalizing the insured for its loss.