Indemnity in kind (repair through a network)
A settlement method in which the insurer has the damaged property repaired or replaced by providers in its network instead of paying money, reducing claim cost and fraud.
An insurance indemnity is in principle a sum of money, but the policy may provide that the insurer repairs or replaces the property itself, through contractors, garages or approved suppliers with whom it has negotiated rates and quality standards. Settlement in kind is used in motor, glass breakage, water damage, appliances and mobile phones. For the insurer, it offers three benefits: a lower average cost thanks to negotiated rates, control over quality and turnaround, and less fraud, since the insured receives no money they might not spend on the repair. For the insured, it removes the need to advance costs, but it limits the choice of provider, which lawmakers regulated in motor insurance by guaranteeing free choice of repairer. The rise of these networks turns claims management into supply chain management.
Since the Hamon Act of March 17, 2014, motor insurers must inform policyholders that they are free to choose their repairer: a driver who has a 1,200 euro bumper repaired in 2025 at a usual garage rather than the approved one cannot be denied compensation on that ground.
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