Question

Write short notes on:

Mitigation of Loss as a Principle of Insurance.

Answer 1

The covered person must do everything they can to lower the loss or damage after an accident or disaster. This is called the Principle of Mitigation of Loss. They can’t be careless or let more damage happen just because they have insurance.

For example, if a fire breaks out in a shop, the owner should try to control the fire and call the fire department, rather than doing nothing and waiting for the insurance company to pay for the damage.

Insurance companies expect policyholders to act responsibly and try to limit their losses. If someone does not attempt to mitigate the damage, the insurance company may reject or reduce the claim.