Concept:Insurance contracts are based on certain established legal principles.
These principles govern the validity and enforcement of an insurance policy.
Explanation:The basic principles of insurance include insurable interest, utmost good faith, proximate cause, indemnity, subrogation, contribution, and loss minimization.
Insurable interest means the insured must financially benefit from the safety of the subject matter.
Proximate cause determines the actual cause of loss to establish liability.
Subrogation allows the insurer to take over the insured’s rights after paying a claim.
Surrender value is not a principle of insurance.
It is a feature of life insurance policies. It refers to the amount payable when a policyholder cancels the policy before maturity.
Therefore, it is a policy benefit or value, not a guiding principle.
Answer:C. Surrender value is not a principle of insurance.