Match each fundamental insurance principle on the left with its corresponding legal definition or practical application on the right.
- Uberrimae FideiRequires the insured to disclose all material facts fully and truthfully when applying for a policy.
- Principle of SubrogationAllows the insurer to step into the legal rights of the insured to recover damages from a negligent third party after compensating the claim.
- Principle of Proximate CauseDetermines the direct, dominant, and efficient cause of a loss to establish whether the event is covered under the policy.
- Principle of ContributionRequires multiple insurers covering the same risk on a property to share the indemnification payment proportionally.
Answer
Uberrimae Fidei matches with requiring full disclosure of all material facts; Subrogation matches with allowing the insurer to take over legal rights against a third party after indemnification; Proximate Cause matches with identifying the direct, dominant cause of loss; and Contribution matches with sharing indemnification proportionally among multiple insurers.
Each principle correctly pairs with its legal doctrine: Uberrimae Fidei enforces complete disclosure of material facts; Subrogation permits the insurer to step into the policyholder's shoes to pursue third-party liability after indemnity; Proximate Cause isolates the immediate, dominant peril that led to loss; and Contribution allocates the loss payout rateably among co-insurers covering the same subject matter.
Step-by-Step Solution
Key Concept
Core Principles of Insurance Law