Principle of Contribution
The Contribution Principle in insurance refers to the concept that if a customer has multiple insurance policies covering the same risk, each insurer should contribute proportionally to the claim.
The Principle of Contribution ensures that no single insurer bears the entire financial burden of the loss. It promotes a fair distribution of liability among the different insurance companies involved. It helps prevent overcompensation and encourages a more equitable sharing of financial responsibility.
For more information, check out our article on Principles of Insurance.