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GCE Commerce 1990 Question 49

Question 49

Insurance

With the exception of life assurance and personal accident insurance, contracts of insurance are contracts of

  1. A.premium
  2. B.indemnity
  3. C.proximate cause
  4. D.utmost good faith
  5. E.general average cause
Show the answer and explanation

Answer: B (indemnity)

Explanation

Most insurance only restores the insured to his position before the loss (indemnity); a life cannot be valued, so life and personal accident policies are not indemnity contracts.