New Click here to Enroll for SIDBI MSME Expert Class by ex-GM, SBI on Nov 24

    Register

    Question

    What is the principle of contribution in insurance? 

    A If a person has more than one insurance policy covering the same risk, then each insurer will contribute towards the loss in proportion to the sum insured Correct Answer Incorrect Answer
    B The insurer who pays for the loss should have the right to take over the insured's rights against third parties that caused the loss Correct Answer Incorrect Answer
    C Only the loss caused by the peril covered in the insurance policy will be compensated Correct Answer Incorrect Answer
    D The insured must take reasonable steps to minimize the loss after the occurrence of the insured event Correct Answer Incorrect Answer

    Solution

    The principle of contribution requires that if a person has more than one insurance policy covering the same risk, then each insurer will contribute towards the loss in proportion to the sum insured.

    Practice Next

    Relevant for Exams: