The principle of loss compensation means that after the insurance contract comes into effect, if there is a loss within the scope of the insurance contract, the insured has the right to obtain comprehensive and sufficient compensation in accordance with the contract; Insurance compensation is to make up for the economic benefits that the insured has lost due to the loss of the subject matter insured, and the insured cannot obtain additional benefits due to insurance compensation.

2. What is the principle of loss compensation in insurance?

The principle of loss compensation in insurance refers to that the insured and the insurer conclude an insurance contract and transfer specific risks to the insurer; When an insurance accident occurs, the economic compensation given by the insurer to the insured just fills the economic losses suffered by the insured. "Make up for the loss" is called "compensation" in the insurance relationship. The principle of insurance compensation is determined by relevant laws and usually includes two meanings:

First, after the conclusion of the insurance contract, if the subject matter insured suffers losses due to the insured accident, the insured has the right to obtain comprehensive and sufficient compensation according to the contract;

Second, the insurer's compensation to the insured only restores the subject matter insured to the state before the accident, that is, the insurance compensation is limited to the actual loss of the insured, and the insured cannot obtain additional economic benefits due to the insurance compensation.

The principle of loss compensation is not only limited by loss, but also by other restrictions stipulated in the insurance contract, such as the amount of insurance, proportional insurance and thus proportional compensation. In addition, it is also limited by the way of compensation, such as the deductible or compensation limit stipulated by some insurance.

The principle of loss compensation only applies to property insurance and life insurance contracts for reimbursement of expenses, such as "additional hospitalization medical insurance" and "additional accidental injury medical insurance" of Pacific Insurance Company, but not to life insurance with fixed compensation.

The purpose of following the principle of loss compensation is to give full play to the economic compensation function of insurance; Avoid turning insurance into gambling; Prevent moral hazard from happening. The principle of compensation is usually realized by cash payment, repair, replacement and replacement.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.