The theory of indemnity does NOT include which of the following?

The theory of indemnity is a fundamental principle in insurance that aims to restore the insured to the financial position they were in prior to a loss, without allowing them to profit from the insurance claim. This principle is centered around ensuring that the compensation reflects the actual loss suffered.

Actual cash value, replacement cost, and agreed value are all methodologies employed to determine the amount of a claim under the principle of indemnity.

Actual cash value typically accounts for depreciation, representing the fair market value of the insured item at the time of loss. Replacement cost refers to the amount necessary to replace the damaged or lost item with a new one of like kind and quality, without consideration for depreciation. In instances where an agreed value has been established, it serves as a predetermined sum that both the insurer and insured have consented to as the value of the property, simplifying the process of claim assessment.

In contrast, concurrent causation refers to a situation where two or more causes contribute to a loss. The recognition of various causes impacting a loss is often more complex and does not align with the straightforward premise of indemnity, which focuses on the direct correlation between the loss suffered and the compensation provided. Thus, the inclusion of concurrent causation does not fit within the scope of the