Indemnity
Gbogbo ọrọ náà
Insurance exists to put you back on your feet, not to make you rich. That single idea is the principle of indemnity, and it quietly governs almost every claim ever paid. It explains why a three year old laptop is not replaced with a brand new one, why a trader who insures a shop for less than it is worth recovers less than the fire destroyed, and why the insurer, not the insured, usually decides whether to repair or to pay cash.
In this lesson you will learn what indemnity really means, the four ways an insurer can deliver it, and the limits that decide how much money actually reaches the claimant: the sum insured, average, the excess and the franchise. You will work through the calculations examiners set every year, meet the two classes of insurance to which indemnity does not apply at all, and learn the traps that cost candidates easy marks.
Ebumnobi
- Define indemnity and explain how it restores the insured to the former financial position
- Explain why indemnity prevents the insured from profiting from a loss
- Describe the methods of providing indemnity: cash payment, repair, replacement and reinstatement
- Explain the operation of average, excess, franchise and the sum insured as limits on indemnity
- Identify the contracts of insurance to which indemnity does not apply and explain why
Maapụ uche
E seela isiokwu a ka ị hụ otu echiche si ejikọta.
Kaadị ncheta
Omume ncheta ngwa ngwa n'ihe a na-anwale n'isiokwu a.
Akwụkwọ Ọmụmụ
Yi rajista ka ci gaba
Kpọpụta akaụntụ n’efu ka ị nweta ohere na ihe ọmụmụ niile, ajụjụ omume, ma soro mmepe gị.
Nnyocha Ọmụmụ
Ekele diri gi maka imecha ihe karịrị na Indemnity. Ugbu a na ị na-enyochakwa isi echiche na echiche ndị dị mkpa, ọ bụ oge iji nwalee ihe ị ma. Ngwa a na-enye ụdị ajụjụ ọmụmụ dị iche iche emebere iji kwado nghọta gị wee nyere gị aka ịmata otú ị ghọtara ihe ndị a kụziri.
Ị ga-ahụ ngwakọta nke ụdị ajụjụ dị iche iche, gụnyere ajụjụ chọrọ ịhọrọ otu n’ime ọtụtụ azịza, ajụjụ chọrọ mkpirisi azịza, na ajụjụ ede ede. A na-arụpụta ajụjụ ọ bụla nke ọma iji nwalee akụkụ dị iche iche nke ihe ọmụma gị na nkà nke ịtụgharị uche.
Jiri akụkụ a nke nyocha ka ohere iji kụziere ihe ị matara banyere isiokwu ahụ ma chọpụta ebe ọ bụla ị nwere ike ịchọ ọmụmụ ihe ọzọ. Ekwela ka nsogbu ọ bụla ị na-eche ihu mee ka ị daa mba; kama, lee ha anya dị ka ohere maka ịzụlite onwe gị na imeziwanye.
- The principle of indemnity means that the insured is: A. Paid the original cost of the property B. Restored to the same financial position held immediately before the loss C. Paid the cost of replacing the property with a new one D. Paid the sum insured in every case Answer: B
- Which of the following is NOT a method of providing indemnity? A. Cash payment B. Repair C. Replacement D. Subrogation Answer: D
- Property worth 2,000,000 naira is insured for 1,500,000 naira under a policy subject to average. A fire causes a loss of 800,000 naira. How much will the insurer pay? A. 800,000 naira B. 600,000 naira C. 500,000 naira D. 1,500,000 naira Answer: B
- Which of the following is NOT a contract of indemnity? A. Fire insurance B. Motor own damage insurance C. Life assurance D. Marine cargo insurance Answer: C
- The first amount of every claim which the insured must bear is called the: A. Franchise B. Excess C. Salvage D. Premium Answer: B
Yi rajista ka ci gaba
Kpọpụta akaụntụ n’efu ka ị nweta ohere na ihe ọmụmụ niile, ajụjụ omume, ma soro mmepe gị.
Yi rajista ka ci gaba
Kpọpụta akaụntụ n’efu ka ị nweta ohere na ihe ọmụmụ niile, ajụjụ omume, ma soro mmepe gị.
Akwụkwọ A Na-atụ Aro
Ajụjụ Nnyocha
Nna, you dey wonder how past questions for this topic be? Here be some questions about Indemnity from previous years.
Ajụjụ 1 Ripọtì
List and explain five principles of insurance.
Akọwa Nkọwa
Five principles of insurance
- Utmost good faith (uberrimae fidei): Both parties to the contract, and especially the proposer, must disclose all material facts truthfully and completely. Concealment or misrepresentation of a material fact makes the contract voidable at the option of the insurer.
- Insurable interest: The insured must have a legal or financial relationship with the subject matter such that he benefits from its safety and suffers loss from its damage or destruction. Without insurable interest the contract is void because it would amount to gambling.
- Indemnity: The insurer undertakes to restore the insured, so far as money can, to the exact financial position he occupied immediately before the loss, no better and no worse. This prevents the insured from making a profit out of a loss. (It does not apply to life and personal accident.)
- Subrogation: After indemnifying the insured, the insurer takes over the insured's legal rights and remedies against any third party responsible for the loss, so that the insurer can recover its outlay. This supports the principle of indemnity.
- Contribution: Where the same risk is insured with more than one insurer, each insurer shares the loss rateably in proportion to the sum it insured, so that the insured recovers only the actual loss once and not more.
A further principle is proximate cause, under which the insurer is liable only where the nearest, most effective cause of the loss is a peril insured against.
Yi rajista ka ci gaba
Kpọpụta akaụntụ n’efu ka ị nweta ohere na ihe ọmụmụ niile, ajụjụ omume, ma soro mmepe gị.