The principle of indemnity in insurance means

Question

Question: The principle of indemnity in insurance means

Options:

1.  A person has the right to sue an insurer for loss when they are not satisfied with the payment of a claim
2.  That a person may not collect more than his/her actual financial loss in the event of damage caused by an insured peril
3.  That a person will not be reimbursed for a loss unless he can show proof of loss
4.  An employer is always responsible for the careless acts on an employee
5.  A adjusters may not be held liable for twice the claim if a settlement has already been reached on a policy

Answer 1

2. That a person may not collect more than his/her actual financial loss in the event of damage caused by an insured peril

The principle of indemnity in insurance means that a person may not collect more than his/her actual financial loss in the event of damage caused by an insured peril.