Question:medium

An insurance contract is based on some basic principles of insurance, which of the following is against those principles?

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Key principles of insurance include utmost good faith, causa proxima, and indemnity. Insurer interest is not one of them.
Updated On: Feb 11, 2026
  • Principle of utmost good faith
  • Principle of insurer interest
  • Principle of causa proxima
  • Principle of indemnity
Show Solution

The Correct Option is B

Solution and Explanation

Key insurance principles include:
Utmost good faith: Both the insurer and insured parties must honestly reveal all relevant information.
Causa proxima (Proximate cause): Policies should cover losses directly caused by a specified event.
Indemnity: Insurance aims to return the insured to their pre-loss financial state, preventing profit.
The insurer's financial interest is not a core insurance principle; it pertains to the insurer's own financial stake, not a standard element of insurance agreements.

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