Question on: JAMB Commerce - 2024
Which of the following types of insurance is usually excluded from the principle of indemnity?
A
Fire
B
Fidelity Guarantee
C
Marine
D
Life
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Correct Option: D
The principle of indemnity aims to restore the insured to the same financial position they were in before the loss. This principle is not always applied to all types of insurance.
Life insurance: This is a type of insurance that is usually excluded from the principle of indemnity because the value of a human life cannot be precisely determined and restored. The payout in life insurance is a pre-agreed amount.
Fire, Marine, and Fidelity Guarantee insurance policies are usually subject to the principle of indemnity.
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