What does indemnity mean in insurance? What is the definition of indemnity concerning car insurance? Here, you could find the answer to those questions. Keep reading to get familiar with the term indemnity in general and with the insurance indemnity meaning.
In general, indemnity is the compensation paid by one party to another concerning a specific loss suffered by the party who is receiving it. The party who pays the compensation, also known as the indemnitor, might not be responsible for the other party’s loss, but they might have it. Indemnity could come in many forms. They could include repairing of damages, replacement of items, reinstatement of services, and cash payments.
Legally speaking, indemnity has a wide meaning. The intention of an indemnity is to have a separate party to a contract whole again when a particular contractual situation should occur. This situation should be plainly detailed in the contract. Still, the actions that should be done to have the contract whole are commonly unwritten and are also unknown to the parties involved in the contract up to the point the situation occurs. Frequently, the maximum liability for indemnity is stated in the contract. In terms of the law, an indemnity and a guarantee are not considered similar, even when they may appear the same.
Car Insurance Indemnity: What Does It Mean Exactly?
Even when it comes about very cheap car insurance no deposit policy, or any other affordable insurance plan the insurance provider could have the obligation of indemnification. If this is the case, when a policyholder is part of an accident where he or she is evidently at fault, the insurance provider has an obligation to indemnifying the insured driver for very particular situations to guarantee that they are whole again.
If this is the case, the insurance provider could be obliged to pay compensation to the policyholder, say, for instance, to pay for the loss of income while the driver receives medical treatment. The insurer could need to pay damages for legal and medical charges or pain and suffering produced by the accident. There could also be charges to pay concerning towing the vehicle to a workshop, repairing the broken vehicle to restore it to its previous conditions, and rental costs for cars that policyholders should use while waiting for their own vehicles to be repaired. So, this is car insurance indemnity, the general assurance a policyholder receives of getting from the insurance provider the means to restore the injured party to have them whole once again.