Which of the following is a fundamental purpose of the principle of indemnity?

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Which of the following is a fundamental purpose of the principle of indemnity?

A) to reduce moral hazard
B) to minimize physical hazards
C) to settle property insurance losses on a replacement cost basis
D) to require deductibles in all property insurance policies

Answer: A) to reduce moral hazard

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?

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? a) $0 b) $30,000 c) $32,000 d) $40,000 Answer: B

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James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?

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The pro rata liability clause is designed to protect the principle of
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Life insurance policies will normally pay for losses arising from
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In an insurance contract, the applicant's "consideration" is the
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How many pair of glasses in a 12-month period will a vision expense insurance plan cover?
The voluntary relinquishment of a legal right is called
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