77. A principle of insurance that states a person should be made whole, no better, no worse, is
Answer: B
Indemnity
The principle of insurance that states a person should be made whole, no better, no worse, is known as indemnity. This principle ensures that the insured is compensated for their losses without profiting from the insurance claim.
A) adhesion.
The principle of adhesion refers to the nature of insurance contracts being take-it-or-leave-it agreements where one party has significantly more power than the other, typically the insurer. This principle does not relate to the compensation or settlement process of insurance claims.
B) indemnity.
Indemnity is the correct principle as it ensures that the insured is restored to their original financial position before the loss occurred, thus preventing any profit from the insurance claim. This principle is fundamental to the functioning of insurance, ensuring fairness and preventing moral hazard.
C) subrogation.
Subrogation is the right of an insurer to pursue a third party that caused an insurance loss to the insured. While it is an important concept in insurance, it does not pertain to the principle of making the insured whole, making it incorrect in the context of the question.
D) aleatory.
Aleatory refers to contracts where the performance depends on an uncertain event, such as insurance policies where the premium paid may not equate to the payout received. This concept does not address the principle of compensation and therefore is not relevant to the question.
Conclusion
Indemnity is the definitive principle that ensures a policyholder is compensated for their losses without any financial gain. Other options like adhesion, subrogation, and aleatory do not directly address the principle of making an insured party whole, reinforcing why indemnity is the correct answer.