What is the principle of 'MITIGATION' of insurance?

It is the duty of the insured to take reasonable steps to minimise the loss or damage to the insured property.

The correct answer is option 2- It is the duty of the insured to take reasonable steps to minimise the loss or damage to the insured property.

Mitigation: This principle states that it is the duty of the insured to take reasonable steps to minimise the loss or damage to the insured property. Suppose goods kept in a store house catch fire then the owner of the goods should try to recover the goods and save them from fire to minimise the loss or damage. The insured must behave with great prudence and not be careless just because there is an insurance cover. If reasonable care is not taken like any prudent person then the claim from the insurance company may be lost.

OTHER OPTIONS-

• It is the right of an insurer who has paid claim under an insurance, to call upon other liable insurers to contribute for the loss of payment.- PRINCIPLE OF CONTRIBUTION.
• It refers to the right of the insurer to stand in the place of the insured, after settlement of a claim, as far as the right of insured in respect of recovery from an alternative source is involved.- PRINCIPLE OF SUBOGRATION.
• The insured must have an insurable interest in the subject matter of insurance.-PRINCIPLE OF INSURABLE INTEREST.