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1960 Ins. L.J. 471 (1960)
The Principle of Indemnity: A Critical Analysis

handle is hein.journals/inslj22 and id is 471 raw text is: The Principle of Indemnity:
A Critical Analysis
It has long been a principle that an insured not gain because of a
loss. This article analyzes several decisions indicating a trend away
from this indemnity concept where replacement costs are concerned.
NDEMNITY has long been the cornerstone of property insurance
law. American legal and insurance wri ters have shown an almost
universal acceptance of the principle of indemnification.' With the
exception of those states having valued policy laws, American legisla-
tures and courts have always adhered to the broad concept that an
insured should be restored to that position he occupied just prior to a
loss-no more and no less.
However, in recent years American writers and courts, while
giving lip service to indemnification as the basis for their findings,
have stretched and distorted the concept to such a degree that it is
often no more than a sterile clich6. Specifically, the so-called no
depreciation rulings 2 and statements setting forth that replacement
1 See William Rodda, Fire and Property Insurance (Englewood Cliffs, New
Jersey, Prentice-Hall, Inc., 1956), pp. 118-119; John H. Magee, Property Insurance
(Homewood, Illinois, Richard D. Irwin, Inc., 3d Ed., 1955), pp. 105-106; Frank
J. Angell, Insurance Principles and Practices (New York, The Ronald Press Com-
pany, 1959), p. 10; S. S. Huebner and Kenneth Black, Jr., Property Insurance
(New York, Appelton-Century-Crofts, Inc., 1957), pp. 16-17; J. Edward Hedges,
Practical Fire and Casualty Insurance (Cincinnati, The National Underwriter
Company, 6th Ed., 1954), p. 5; Robert I. Mehr and Emerson Cammack, Principles
of Insurance (Homewood, Illinois, Richard D. Irwin, Inc., Revised Ed., 1957),
pp. 125-126; William R. Vance, Handbook of the Law of Insurance (St. Paul,
West Publishing Company, 2d Ed., 1930), p. 75; Roland H. Long (editor),
Richards on the Law of Insurance (New York, Baker, Voorhis & Company, 4th
Ed., 1932), pp. 32-3'8.
'See the following articles for a listing and a discussion of the no-deprecia-
tion cases: Wilfred G. Howland, Depreciation and Partial Losses, THE INSUR-
(Continued on following page)

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