normal fire or houseowners
and householders policy
the insured against loss. This means that the insured will receive
only market value for damage to the improvements by the risk insured
against. The principles of indemnity are:
- the insured
cannot make a profit from the happening.
- the insured
must have an interest in the property.
is expensive but by underinsuring, the insured runs the risk of
insufficient compensation because if the insurance contract has a
to average clause.
Indemnity insurance is becoming less popular being replaced by
you insure your home for its indemnity
The indemnity value is the replacement
value less depreciation or market value of the building(s).
When you renew an indemnity policy you must insure your home for its
replacement value less a reasonable allowance for depreciation based
on the age and condition of the home. If you do not insure it for
this amount, we may refuse a claim or cancel this policy, or do both.
should work out how much it would cost to totally rebuild your home
and all the home improvements on the site and then you apply
depreciation to this figure based on the age and condition of your
best way to determine the indemnity value of your home is to
obtain a valuation from a qualified valuer. The valuer will charge
you a fee when they value your home. He/she will determine how much
your home has depreciated according to market principles. This beyond
the scope of the layperson.