The principle of indemnity will prevent:
A) the act of one person being assigned to another.
B) an insured from collecting more than what he or she has lost.
C) a negligent third party from being held liable for damages if the injured party is insured.
D) a significant amount of loss control activity.
E) an insurer from ever waiving its right to subrogation.

Question

Quizplus · Accepted Answer

The principle of indemnity states that an insured should not be reimbursed more than the amount of loss suffered. Therefore, option B is correct, as the principle of indemnity will prevent an insured from collecting more than what he or she has lost. Option A is incorrect because the assignment of one person's rights to another is not related to the principle of indemnity. Option C is incorrect because the negligent third party can still be held liable for damages even if the injured party is insured. Option D is incorrect because loss control activities are not related to the principle of indemnity. Option E is incorrect because the insurer may choose to waive its right to subrogation if it wishes to do so.

The Principle of Indemnity Will Prevent