The principle of indemnity generally limits the amount that the insured may collect to the actual cash value of the property.

Question

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The principle of indemnity is based on the concept that an insured should not profit from an insurance claim. Therefore, the amount that the insured may collect is generally limited to the actual cash value of the property at the time of the loss, and not the full replacement cost.

The Principle of Indemnity Generally Limits the Amount That the Insured