Difference between Insurance reinstatement and indemnity?

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Also known as the Reinstatement Cover and the Indemnity cover, the reinstatement cover means that the insurers will pay to replace the item with a new one which is equal to but not better than the item lost or damaged. This is usually the basis of cover under the Event Assured "all risks" cover, provide the sum insured represent the full replacement cost.

Indemnity basis means that the insurance will only pay for the second hand value of the item i.e. what you might get if you sold it. This is its market value, not the written down value, nor what it would cost to replace, and so may be inadequate, particularly if the item is hired and the owner wants a replacement.
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