The main purpose(s) of the principle of indemnity is to reduce moral hazard by I. eliminating excessive deductibles II. holding the correct party responsible for a loss responsible both I and II II only neither I nor II I only
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Text: Keith's insurance agent is attempting to explain some of the basic insurance terms. Select the CORRECT statement(s) presented by the insurance agent. I. Malicious mischief is an example of a peril. II. The ability to contribute to a health savings account is an example of risk retention. III. Lighter fluid left near a gas heater is an example of a physical hazard. IV. An example of risk reduction would be installing smoke detectors in your home. A) I, II, and IV B) I, II, III, IV C) II and IV D) I, II, III
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10. The indemnity principle means that the insured is not entitled to make a profit on his loss: a. subrogation b. causa proxima c. indemnity d. uberrima fides 11. The purpose of subrogation is to hold the negligent person responsible for the loss and prevent the insured from collecting twice for the same loss. a. subrogation b. causa proxima c. indemnity d. uberrima fides 12. The causa proxima principle in insurance mentions that the cause of loss must be direct and insured in order to claim for compensation. a. subrogation b. causa proxima c. indemnity d. uberrima fides 13. The insurable interest principle in insurance mentions that the assured must have insurable interest in the life or property insured. a. subrogation b. causa proxima c. indemnity d. insurable interest
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