Insuring existing losses
Making false insurance claims
Paying excessively for insurance cover
Profiting from insurance
Answer is Right!
Answer is Wrong!
The correct answer is: A. Insuring existing losses.
Indemnity is the principle that an insured person should be restored to the same financial position they were in before the loss occurred. This means that the insurer should only pay out enough to cover the actual cost of the loss, not any additional profits or gains that the insured person may have made.
Option B is incorrect because making false insurance claims is a form of fraud, and insurers have a number of measures in place to prevent this from happening.
Option C is incorrect because policyholders should not have to pay excessively for insurance cover. Insurers compete with
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