Page 7 - Fire Insurance Ebook IC 57
P. 7
The Insurance Times
The destruction or damage to the latter involves
the insured in financial loss. Absolute legal
ownership is a clear example of insurable
interest. For e.g, a bank or a financial institution
which has advanced money on the security of a
property, has insurable interest in that property.
In Fire insurance policy, the insurable interest should
exist at the time of taking the policy, throughout its
currency period and also at the time of loss/claim.
Fire insurance policies are personal contracts, so if
the property is sold or transferred, the policy is not
transferred automatically.
(iii) Indemnity - The objective of the principle is to place
the insured , as far as possible, in the same financial
position after a loss, as that occupied by him,
immediately before the loss.
In simple words, the principle of indemnity means
the insured is indemnified only to the extent of his
loss, no profit or undue benefit is extended. The
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