Principles of Insurance

Principles of insurance are fundamental guidelines that ensure fairness and stability in the insurance process. They include *utmost good faith*, meaning both parties must share truthful information; *insurable interest*, where the policyholder must have a genuine stake in the risk; *indemnity*, to restore the insured to their original financial position after a loss without profit; *proximate cause*, the direct link between the cause of loss and the event insured against; and *contribution*, preventing multiple policies from overcompensating the same loss. These principles help maintain trust and efficiency in insurance agreements.