PRINCIPLE OF LOSS MINIMIZATION


PRINCIPLE OF LOSS MINIMIZATION
•Under this principle it is the job of the insured to take all possible steps to minimize losing to the insured property on the happening of uncertain event.
According to the Principle of Loss Minimization, insured must always try his level best to minimize the loss of his insured property, in case there is an uncertain event like a fire outbreak or blast, etc. The insured must take all possible measures and necessary steps to manage and reduce the losses in this scenario. The insured must not neglect and behave irresponsibly during such events simply because the property is insured. Hence it is just a responsibility of the insured to protect his insured property and avoid further losses.
As an example: Assume, Mr. Arvind's house is set burning as a result of a power short-circuit. In this tragic scenario,
Mr. Arvind must try his level best to stop fire by all possible means, like first calling nearest fire department office, asking neighbours for emergency fire extinguishers, etc. He must not remain inactive and watch his
house burning hoping, "Why should I worry? I've insured my house."



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