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State the exceptions to the principle of indemnity in insurance
• Replacement cost insurance. This means that there is no deduction for depression in determining the amount paid for loss. Replacement cost insurance is based on the recognition that actual value can still result in a substantial loss for the insured.
• Valued policy. A valued policy is a policy that pays the face amount of insurance if total loss occurs. Due to difficulty in determining the actual cash value of property at the time of loss, the insurer and the insured both can agree on the value property when the policy is first issued.
• Valued law policy. These are laws that exist in some countries that require the payment of the face amount to the insured if the total loss of the property occurs due to peril specified in the law.
skilled writter answered the question on May 1, 2018 at 16:15
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