It refers to the amount payable by the insurer to the insured, either in the form of cash, repair, replacement, or reinstatement in the event of an insured loss, and measured by the extent of the insured’s loss. It is set at a figure equal to, but not more than, the actual value of the subject matter insured just before the loss, subject to the adequacy of the sum insured. This means for many crops that an escalating indemnity level is established, as the growing season progresses.
