Life & Health · Chapter 1 · Industry Basics
Principle of Indemnity
Definition
Restore the insured to the financial position they were in before the loss — no profit from the loss. Typical of health, property & casualty insurance.
In plain English
Insurance makes you whole again; it never makes you richer than before the loss.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms