Fundamental purposes of the principle of indemnity include which of the following?

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Fundamental purposes of the principle of indemnity include which of the following?

I. To reduce physical hazards
II. To prevent the insured from profiting from insurance

A) I only
B) II only
C) both I and II
D) neither I nor II

Answer: B) II only

Insurance

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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

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