Why Is an Insured Entitled to Collect Only the Amount

question 64

Multiple Choice

Why is an insured entitled to collect only the amount of the actual loss incurred from its insurance coverage?

• A) Contracts of indemnity prevent profiting from an insured against event.
• B) A bank is entitled to an indemnity contribution on a prorated basis.
• C) Insurance coverage typically covers a minimum portion of the value of property.
• D) A bank may be entitled to an interest in the proceeds for a secured loss.

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Definitions:

Catalog Price

The price listed in a catalog, not accounting for any discounts or promotions.

Credit Terms

Credit Terms are the payment terms and conditions established by a seller, including the period that has to pass before an invoice is considered overdue.

Cost Of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, carried over from the end of the previous period.