Indemnity means restoring the insured to the position they were in before the loss occurred. Some risks are non-indemnifiable, since the insured can never truly be restored to their previous state. There are three cases:
- The value policy: the insurance company agrees to pay a stated sum if the loss occurs, regardless of the actual value of the property insured.
- Life insurance: non-indemnified, since no amount of money can restore a life.
- Personal accident insurance: covers disabilities from accidents, and also doesn’t follow the principle of indemnity.
