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      Question

      What is the principle of contribution in insurance? 

      A If a person has more than one insurance policy covering the same risk, then each insurer will contribute towards the loss in proportion to the sum insured Correct Answer Incorrect Answer
      B The insurer who pays for the loss should have the right to take over the insured's rights against third parties that caused the loss Correct Answer Incorrect Answer
      C Only the loss caused by the peril covered in the insurance policy will be compensated Correct Answer Incorrect Answer
      D The insured must take reasonable steps to minimize the loss after the occurrence of the insured event Correct Answer Incorrect Answer

      Solution

      The principle of contribution requires that if a person has more than one insurance policy covering the same risk, then each insurer will contribute towards the loss in proportion to the sum insured.

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