Florida Insurance Claims Adjuster License Practice Exam

What is the principle called where one should not profit from an insurance policy payment?

1. Indemnity

2. Subrogation

3. Insurable Interest

4. Comparative Negligence

The correct answer is: Indemnity

Indemnity is the principle where an insured party should not profit from an insurance policy payment. This means that the insured party should not receive more than the actual loss or damage they have suffered. This principle ensures that the insured party is not financially incentivized to cause harm or loss in order to receive a larger payout from the insurance company. Option B, Subrogation, refers to the right for an insurance company to legally pursue a third party who is responsible for the insured party's loss or damage. This does not relate to the principle of not profiting from an insurance policy payment. Option C, Insurable Interest, is the principle that states an insured party must have an insurable interest in the subject matter of the insurance policy. This means that the insured party must stand to suffer financial loss if the subject matter of the policy is damaged or destroyed. This also does not relate