1. The principle of indemnity holds that an insured should:

Be restored to their pre-loss financial condition without profiting from the loss

The principle of indemnity aims to restore the insured to the pre-loss position without allowing a financial gain.

2. The consideration given by the insured when forming an insurance contract is:

The premium and the statements made in the application

The insured's consideration consists of the premium paid and the representations made in the application.

3. An insurance policy is described as a conditional contract because:

Certain conditions must be met before the insurer is obligated to pay a claim

A conditional contract requires that stated conditions, such as paying premiums and filing proof of loss, be met before the insurer pays.

4. The authority an insurer specifically grants to a producer in the written agency agreement is called:

Express authority

Express authority is the power specifically granted to the producer in the agency contract.