Question

Distinguish between Principle of Indemnity and the Principle of Insurable Interest.

Answer 1

Principle of Indemnity	Principle of Insurable Interest
Indemnity means a promise to compensate in case of a loss. Except for life insurance, it refers to the guarantee of compensation in the event of a loss. The insured will only be reimbursed for the amount of loss suffered by him. The insured party cannot profit from this insurance deal.	Insurance contracts require a monetary interest from the insured to be legally binding. Insurable interest refers to a person's loss resulting from the destruction of insured property.