What must an insured do if previously paid property is recovered after a claim?

When an insured recovers previously paid property after a claim has been settled, they are obligated to return that property to the insurance company. This process is grounded in the principle of indemnity, which is aimed at preventing the insured from profiting from their loss.

In the case of recovering property that has already been replaced or compensated for through an insurance payout, returning the property ensures that the insurer is not unnecessarily providing a financial benefit from the same loss. The company's compensation was intended to cover the loss of that specific property, and if it is recovered, the insurer maintains rights to it, given they have already compensated the insured. This aligns with standard practices within property insurance and is reflected in most standard insurance policy agreements.

Therefore, the correct procedure is for the insured to relinquish the recovered property to the insurance company, as retaining it while having already received payment would create a conflict with the principle of indemnity and could be perceived as unjust enrichment.