An indemnity insurance policy pays you the actual monetary value of lossed or damaged goods as they are worth today after depreciation. For example if you had a new bike 2 years ago that cost £500. Today it will be worth £170 due to its age and the depreciation on it. £170 is what the insurance company would pay you when you have an indemnity policy.
Accidental Damage
An accidental damage policy does exactly what it says. Should you accidently damage any
items in your house such as carpets or audio visual equipment then an accidental damage
policy is for you. You will pay an extra premium for this type of cover and it will pay
you to not make any claims to build up your no claims bonus.
Unfortunately accidental damage insurance cover is wide open to abuse and many people
make claims just have things renewed in their home. This is not recommended as when you
make a claim, your no claims bonus is affected and your premium will rise dramatically.
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