What does “indemnity” mean to insurance experts? And, what types of indemnity insurance plans are there? In this article, we go over what indemnity broadly means in the insurance world, as well as more specifically – why you would want an indemnity hospital plan.
Insurance “Indemnification”
Broadly, indemnity refers to the cost afforded to you by your insurance agency to cover your insured expenses. Anyone who has filed an insurance claim and received financial coverage has been indemnified. There are specific types of indemnity insurance, however, the term itself applies more broadly to most types of insurance.
“Indemnification is an agreement where your insurer helps cover loss, damage or liability incurred from a covered event. [It’s] another way of saying your insurer pays for a loss, so you don’t have financial damages.” – The Hartford
Examples
You got into a fender bender at no fault of your own. After filing a claim, the indemnity clause on your auto policy guarantees to cover the repair costs and any medical treatments necessary. Because you are not a fault, your insurer will contact the other driver’s insurance for them to reimburse the claim
’s cost, in a process known as auto subrogation. Your insurance agency ultimately indemnifies you in the form of a check to cover the costs of your vehicle’s repair.
Homeowners with home insurance policies are indemnified, too, in the event of a tree falling on their house or another covered incident.
Hospital Indemnity Plans (HIPs)
What is a hospital indemnity plan?
Hospital indemnity insurance can be particularly helpful since a majority of Americans don’t have enough savings to cover unplanned medical bills. While health insurance pays for medical services after copays, co-insurance, and deductibles are met, hospital indemnity insurance pays you if you are hospitalized, regardless of any other coverage you may have.
“Hospital indemnity insurance supplements your existing health insurance coverage by helping pay expenses for hospital stays. Depending on the plan, [HIPs] give you cash payments to help you pay for the added expenses that may come while you recover. Typically plans pay based on the number of days of hospitalization.”
Even if your medical insurance covers most of your hospitalization, you can still receive payments from your HIP for extra expenses while recovering.
What do hospital indemnity plans cover?
In general, most plans pay for:
- Hospitalizations with or without surgery.
- Intensive care.
- Critical care.
For higher monthly premiums, some HIPs may cover other hospitalization-related services such as:
- Outpatient surgery.
- Emergency room visits.
- Ambulance services.
Do I need hospital indemnity insurance?
There are a few reasons why you may want to consider it. If you’re expecting an overnight hospital stay, a HIP can end up saving you thousands. For many, however, hospital stays are unexpected, so to air on the side of caution, supplementing your existing health insurance is the best way to plan for the worst. (Especially if you don’t have the extra savings to pay out of pocket for hospital stays.) All in all, HIPs will protect you and (if it’s a family plan) your family from thousands in hospital stays in poor health.
Talk to an Insurance Expert at Saltmarsh Insurance
Our insurance experts bring decades of experience speaking with policyholders one-on-one about how to best tailor their coverage plans to fit their individual needs. Hospital indemnity plans are an invaluable way to protect yourself financially in the event of a hospital stay. There are no two of these plans the same, so it’s important you speak with an insurance expert to go over your options. We’ve built trust in our insurance providers over generations, and promise you the best care and quality customer experience available.
Speak to an insurance expert today by calling 781-729-4615 or contacting us here.
