Which statement regarding the definition of insurance in the Insurance Act is FALSE?

In the context of the Insurance Act, the statement that indemnity must always be in cash form is false. Indemnity in insurance refers to the principle of compensating the insured for their actual loss, which can indeed take various forms. While cash is a common method of settlement, insurance can also provide indemnity through repairs, replacement of property, or other means that restore the insured to the equivalent financial position they were in prior to the loss. This flexibility is an essential aspect of insurance, allowing for various forms of compensation based on the nature of the loss and the specific terms of the policy.

Other statements regarding payment only occurring when a peril damages the object, limits on payment to the actual loss amount, and no payment for losses deliberately caused by the insured reflect the principles outlined in the Insurance Act, reinforcing the intended functioning of insurance policies.