Chapter 11 - Insurance and Taxation

Principles of Insurance

1) Utmost good faith

2) Insurable Interest

3) Indemnity

4) Contribution

5) Subrogation

Utmost good faith

You must declare are material facts abou the item you wish to insure when completeing the application form

You must answer all the questions truthfully and and not hold back on any information thatn would increase the cost of the insurance premium or increase the risk to the insurance company providing the cover

Insurable interest

To insure an item the insurer mist benefit from its existence while simultaneously suffer financially from its loss

Example - U can insure your own car but not ur neighbours car as you would not suffer financially from its loss

Indemnity