Distinguish between the Principle of Indemnity and the Principle of In – InterviewSolution

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1.

Distinguish between the Principle of Indemnity and the Principle of Insurable Interest.

Answer»

Principle, of indemnity	Principle of insurable interest
The word indemnity means security against loss. It implies a promise to compensate in case of a loss, except life insurance. The insured will be compensated only upto the amount of loss suffered by him. The insured party can not make a profit out of this insurance contract.	Every insured person must have a monetary interest, without which no insurance contract is valid legally. A person is said to have an insurable interest in the subject matter insured, if he is benefitted by its existence and suffers a loss by its destruction.

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