The principle of indemnity has been a pivotal topic in insurance cases and treatises, especially in discussions about the meaning of ‘actual cash value’ in policies before the emergence of what are commonly referred to as so called ‘replacement cost’ policies, which dominate the market today. The term ‘so-called’ is deliberately used here to underscore a key aspect of most replacement cost policies: they typically pay only the actual cash value until the actual replacement occurs. This is highlighted in the paper, The Indemnity Principle: From a Financial to a Functional Paradigm, which delves into the historical inadequacies of actual cash value policies in fulfilling policyholders’ needs. It underscores the necessity for a new kind of insurance product, one that guarantees sufficient funds to cover the full cost of replacement or repair as needed. This paper noted:
