Indemnity means, to make whole, or to reimburse someone who suffered a loss—no more, no less.
Insurance involves the principle of indemnity, the making whole or paying full compensation for damages.
- William’s barn was insured for $250,000. When a storm caused $100,000 damage to William’s barn, the insurance policy paid $100,000 to repair the barn.
- Loretta had a major surgery and the medical bill was $64,000. Her health insurance covered the cost of the medical bill.