MANAGEMENT

Detailed explanation-1: -The Principle of Indemnity The insurance company promises to compensate the policyholder for the amount of the loss up to the amount agreed upon in the contract.

Detailed explanation-2: -Principle of Proximate Cause This principle applies when the loss is the result of two or more causes. The insurance company will find the nearest cause of loss to the property.

Detailed explanation-3: -According to the Principle of Subrogation, after paying the compensation, the insurer steps into the shoes of the insured. In other words, when the insured is compensated for the loss or damage to the property insured by him, the right of ownership of such damaged property passes on to the insurer.

Detailed explanation-4: -He neither profits nor is disadvantaged by the loss. The principle of indemnity is applicable to all types of insurance policies except life insurance. Indemnity means security, protection and compensation given against damage, loss or injury.