Indemnity.
In plain English
Indemnity is the foundational idea behind most insurance: a policy exists to make you whole after a covered loss, restoring your finances to roughly where they were before, not to hand you a windfall. It is why a claim pays the value of what was lost rather than an arbitrary amount, why over-insuring does not mean a bigger payout, and why you cannot collect twice for the same loss from two policies. Some coverages, like most life insurance, are exceptions that pay a set amount, but for property and casualty, indemnity is the governing rule.
01Why it matters
Indemnity explains why claims pay actual loss rather than a jackpot, so it sets realistic expectations about what a policy will and will not do after something goes wrong.
02The math, step by step
A covered fire destroys a 15,000 dollar kitchen. Under indemnity, the insurer pays to restore the kitchen to its prior state, about 15,000 dollars minus your deductible, not a larger sum, because the point is to make you whole, not richer.
03What this is NOT
Indemnity does NOT let you profit from a loss. It restores you to your prior financial position, so you cannot collect more than the actual loss or claim twice for the same damage.
04Receipts
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