2025 · Q86
In case of contract of insurance, the principle which states that it is the duty of the insured to take reasonable steps to minimize the loss or damage to the insured property is called:
General Accounting Principles, Auditing and InsuranceCompany accounts
- APrinciple of Subrogation
- BPrinciple of Utmost Good Faith
- CPrinciple of Co-operation
- DPrinciple of Mitigation
Explanation
The duty of the insured to take reasonable steps to minimise loss or damage is the principle of mitigation (also called loss minimisation). Subrogation concerns the insurer's right to step into the insured's shoes, utmost good faith concerns disclosure, and co-operation is not the standard name of this principle.