In insurance, the term "loss" is defined as:
A. Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
B. Compensation to the insured that restores them to the same financial position that they enjoyed previously.
C. The reduction, decrease, or disappearance of value of the person or property insured in a policy, by a peril insured against.
D. An unplanned, unforeseen event which occurs suddenly and at a specific place.
Answer (2)
In insurance, a "loss" refers to the reduction or disappearance of value of the insured property or person due to an insured peril. It is best defined as the decrease in value caused by events like natural disasters or theft. Understanding this term is essential for grasping how insurance policies work, particularly in terms of compensation. ;
In insurance, a "loss" is defined as the reduction or disappearance of value of the insured person or property due to covered perils. The correct answer to the student's question is option C. Understanding this term is crucial for grasping how insurance compensation works following an event that leads to a loss.
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