Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: Under the principle of indemnity, an insured party should be restored to the same financial position as before the loss, without gaining any advantage. Reason R: The purpose of insurance is to provide compensation for the financial loss suffered, and not to create a profit for the insured. In the light of the above statements, choose the most appropriate answer from the options given below:

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Economics · Principles of Insurance

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Both A and R are correct and R is the correct explanation of A

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Answer 1

A is not correct but R is correct

Answer 2

Both A and R are correct and R is the correct explanation of A

Answer 3

A is correct but R is not correct

Answer 4

Both A and R are correct but R is NOT the correct explanation of A

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