Principle of Indemnity

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Principle of Indemnity The principle of indemnity governs that an insurance contract compensates you for any damage, loss or injury caused only to the extent of the loss incurred. Insurance contract ensures that the insurer does not make a profit in the event of an incurred loss.. Principle of Indemnity ensures that: a) The objective of the insurer is to put you back in the same financial condition which you were in before the loss. b) You are compensated after the insurer fully inspects and calculated the loss. The claim you receive is neither less nor more than the loss. c) This principle is followed to ensure that you do not get profited through insurance claim. A common example of indemnification happens with reagrd to insurance transactions. This often happens when an insurance company, as part of an individual's insurance policy, agrees to indemnify the insured person for losses that the insured person incurred as the result of accident or property damage. When you sign up for an auto insurance policy, you are the indemnitee and your insurance company is the indemnitor. Your insurance company agrees to compensate you or another party for losses or damages according to the policy’s terms and limits. Your auto insurance contract makes it your insurance company’s responsibility to indemnify you after you are involved in a covered accident. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful Principle of Indemnity

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