METHOD OF PROVIDING INDEMNITY

There are four basic methods of providing indemnity they are: 

1.cash payments

2.Repair

3.Replacement

4.Reinstatement

Explanations

Cash payments: This involves the insurance company giving cheques for the amount admitted by the insurer under the reported claims.

Repair: This aspect the insurer repairs and put in place all damaged properties by the insured perils.

Replacement: This is a method used by the insurer to replace an object lost due to the insured perils instead of making cash payments.

Reinstatement: This is a method commonly used in fire insurance claims whereby the insurer promises to bring in place and in existence of the object or subject matter of insurance to the actual state and position it was before the fire or any loss.