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 Form 3 business studies revision questions and answers set 3

State the principle of insurance to which each of the following statement relate.
a) Restoring the insured to the financial position he/she was in just before the risk occurred
b) A person can only insure property whose destruction would result to a financial loss to
him/her
c) Whatever remains of the property of insured after the insured has been compensated becomes the property of the insurer.
d) There is a close connection between the cause of loss and the actual risk insured
against for compensation to be affected.

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Answer Text:
a) Principle of indemnity
b) Principle of insurable interest
c) Principle of subrogation
d) Principle of proximate cause


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