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1. Insurance policies are “contracts of indemnification”. True or False? 2. Indemnification is generally intended to...

1. Insurance policies are “contracts of indemnification”. True or False?

2. Indemnification is generally intended to make a party “financially whole”. True or False?

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Answer #1

1. True

Insurance is contract where one party agree to indemnify other party for loss for consideration called premium. The guiding principle is that insurance is taken to put the insurer in the same position as if the event for loss has not occurred. Hence, statement is true

2. True

The intention of insurance is to make insurer financially whole in the extent of loss. In case of indemnity insurance, the companies agree to make the insurer financially whole in the event of unexpected losses by receiving premium. Hence, statement is true.

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