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of its use.
Motor insurance: Type of vehicle; driver details.
Personal Accident insurance: Age, height, weight, occupation, previous medical history.
Life insurance: Age, previous medical history, smoking/drinking habits.

(ii) Insurable Interest: The insured must have an insurable interest in the subject matter of
insurance. One fundamental fact of this principle is that ‘it is not the house, ship, machinery,
potential liability of life that is insured, but it is the pecuniary interest of the insured in them,
which is insured.’ Insurable interest means some pecuniary interest in the subject matter of the
insurance contract. The insured must have an interest in the preservation of the thing or life
insured, so that he/she will suffer financially on the happening of the event against which he/she
is insured. In case of insurance of property, insurable interest of the insured in the subject matter
of the insurance must exist at the time of happening of the event.
(iii) Indemnity: All insurance contracts of fire or marine insurance are contracts of indemnity.
According to it, the insurer undertakes to put the insured, in the event of loss, in the same
position that he occupied immediately before the happening of the event insured against. In other
words the insurer undertakes to compensate the insured for the loss caused to him/her due to
damage or destruction of property insured. The compensation payable and the loss suffered are
to be measured in terms of money. The principle of indemnity is not applicable to life insurance.
(iv) Proximate Cause: According to this principle, an insurance policy is designed to provide
compensation only for such losses as are caused by the perils which are stated in the policy.
When the loss is the result of two or more causes, the proximate cause means the direct, the most
dominant and most effective cause of which the loss is the natural consequence. In case of loss
arising out of any mishap, the most proximate cause of the mishap should be taken into
consideration.
(v) Subrogation: It refers to the right of the insurer to stand in the place of the insured, after
settlement of a claim, as far as the right of insured in respect of recovery from an alternative
source is involved. After the insured is compensated for the loss or damage to the property
insured by him/her; the right of ownership of such property passes on to the insurer. This is
because the insured should not be allowed to make any profit, by selling the damaged property or
in the case of lost property being recovered.
(vi) Contribution: As per this principle it is the right of an insurer who has paid claim under
insurance, to call upon other liable insurers to contribute for the loss of payment. It implies that
in case of double insurance, the insurers are to share the losses in proportion to the amount
assured by each of them. In case there is a loss, when there is more than one policy on the same
property, the insured will have no right to recover more than the full amount of his actual loss. If
the full amount is recovered from one insurer the right to obtain further payment from the other
insurer will cease
(vii) Mitigation: This principle states that it is the duty of the insured to take reasonable steps to
minimise the loss or damage to the insured property. Suppose goods kept in a store house catch