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Indemnity insurance is a kind of insurance policy that offers financial security against losses that may develop as a result of specific occurrences, including accidents, illness, or property damage. In the case of indemnity insurance, the insurer promises to pay the policyholder back for any damages covered by the contract, up to the policy's maximum.
The amount the policyholder must pay out of pocket before the insurer starts to reimburse losses that are covered is known as the deductible, which is often included in indemnity insurance contracts. As an example, in the case of health insurance, the policy may limit or exclude coverage based on a person's pre-existing diseases.
In the healthcare industry, indemnity insurance is often referred to as fee-for-service insurance. A percentage of the cost of the healthcare services acquired will be reimbursed by the insurer to the policyholder under this form of insurance, which gives the policyholder complete freedom of healthcare provider selection. Up to the policy maximum, the amount of reimbursement is frequently calculated as a percentage of the overall cost of the service.
Overall, indemnity insurance helps to reduce the financial risks connected to specific occurrences, giving people and organizations a certain amount of financial security and peace of mind.
