The ________ says that an insured person cannot collect more than the actual loss from an insurable risk.
A) law of large numbers
B) rule of indemnity
C) law of diminishing returns
D) rule of finite loss coverage

Question

Quizplus · Accepted Answer

The rule of indemnity is a fundamental principle of insurance, which states that the insured should be reimbursed only to the extent of their actual financial loss. The purpose of insurance is not to provide a windfall profit to the insured but rather to compensate them for their actual losses. This principle prevents the insured from receiving more than the amount of their loss and also ensures that they do not profit from the loss.

The ________ Says That an Insured Person Cannot Collect More