Final answer:
The principle accurately described with the statement "Insureds are entitled to recover an amount NOT greater than the amount of their loss" is Indemnity.
Step-by-step explanation:
The principle accurately described by the statement "Insureds are entitled to recover an amount NOT greater than the amount of their loss" is Indemnity. Indemnity is one of the fundamental principles of insurance that ensures that the insured is restored to the same financial position they were in before the loss occurred.
For example, let's say a car owner gets into an accident and their car is damaged. With the principle of indemnity, the insurer will compensate the car owner for the cost of repairing the car, but not more than the pre-accident value of the car.
This principle prevents insureds from benefiting financially from an insurance policy and discourages fraudulent claims for profit.