JAMB Commerce 2019 Objective — Question 4

Question 4 of 40 from the Joint Admissions and Matriculation Board (JAMB) Commerce 2019 Objective paper, with the correct answer and a full explanation.

Insurance companies operate on the principle of indemnity. This means that an insured person or firm collects

A. only half of the loss suffered
B. double the value of loss suffered
C. total sum of the premiums paid prior to the loss
D. damage claims equal to the loss sufferedCorrect

Explanation

Indemnity means that an insured is entitled to collect (or be restored for) loss or damage suffered, in an amount equal to the actual loss, not more or less.

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