Which statement is true about indemnity insurance?

The statement about indemnity insurance that holds true is that documentation of loss is mandatory for claims. Indemnity insurance is designed to restore the insured to their original financial position after a loss, without allowing for profit from the claim. This principle underscores the importance of providing evidence of the loss, as insurers require detailed documentation to process claims accurately. Proper documentation allows the insurance company to assess the extent of the loss and determine the appropriate compensation. Without this evidence, the claim process could be compromised, leading to potential disputes and delays in compensation.

The other statements do not align with the principles of indemnity insurance. For instance, earning a profit from claims goes against the fundamental concept of indemnity, which is to reimburse for actual losses only. Moreover, while it is typical for those with an insurable interest to file claims, not just anyone can submit a claim; the claimant must demonstrate a valid stake in the insured property or event. Additionally, proper estimation of potential losses is crucial as it helps determine the coverage needed and the amount that may be claimed in a loss event, making it an essential component of the insurance assessment process.