Insurance guide - contribution

UK Principles of Insurance - Contribution

There are five basic legal principles of insurance that must be seen to apply before the policy is valid - Insurable Interest, Indemnity, Umberrima Fides, Subrogation and Contribution.

Contribution - This means that if the risk was over insured, either because the risk was over estimated, the goods had depreciated since effecting the policy or two policies covered the particular risk, the principle of indeminit still applies.

Where two insurance policies form seperate companies cover the same risk, and one company has fully compensated the insured, they are entitled to recover a porportion of the compensation from the other comapny.

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