Final answer:
The statement in question accurately describes the Principle of Indemnity, which ensures that an insured party cannot recover more than the loss suffered from an insurance policy, hence preventing profits from a claim.
Step-by-step explanation:
The principle that is accurately described by the statement "Insureds are entitled to recover an amount NOT greater than the amount of their loss" is the Principle of Indemnity. This principle ensures that individuals or entities receive compensation for the actual loss suffered and are not profited by an insurance policy. It is a foundational concept in the field of insurance as it maintains the economic balance by preventing the insured from gaining more from the insurance than the loss incurred.
Differentiating from other principles, the Principle of Indemnity is specifically concerned with the compensation and does not permit the insured to recover more than the actual loss. The Doctrine of Subrogation pertains to the insurer's right to step into the shoes of the insured to recover from any third party responsible for the loss. The Principle of Utmost Good Faith refers to the expectation that both parties, the insurer and the insured, act in good faith by declaring all relevant facts honestly. The Principle of Insurable Interest requires the insured to have a legitimate interest in the insured subject so that they suffer a direct loss if the insured event occurs.