Is the Same Principle Applicable to Indemnity Insurance?
It must be noted that Foskett was concerned with a life policy, that is, a non-indemnity insurance. The proceeds of the life insurance are not a valuation of or substitute for the life of the assured. However, it is not clear whether the same principle would apply to indemnity insurance. Dr Lionel Smith argues that in an indemnity insurance, where an asset is insured and destroyed, the proceeds of the insurance policy are determined not merely by the premiums paid but also by the diminution of the value of the asset.[50] Thus, if the asset that was destroyed belonged to the defendant, Foskett does not preclude the argument that where an indemnity insurance is concerned the diminution of the value of the asset should be taken into account when assessing the claimant’s share in the proceeds of the policy.
