How much will Gavin receive for his destroyed machine, given its indemnity and replacement costs?

To determine how much Gavin will receive for his destroyed machine, we need to consider the principles of indemnity and replacement costs in the context of insurance. The principle of indemnity ensures that a policyholder is compensated for their loss but not more than the actual loss incurred, meaning that the compensation cannot exceed the value of their insured item at the time of loss.

If the correct amount to receive is £800, this suggests that the indemnity assessment has evaluated the actual cash value or replacement cost of the machine at the time of its destruction. This amount reflects the loss incurred by Gavin without allowing for profit or a windfall from the insurance claim.

The other amounts may represent either an overestimation of the machine's value or various interpretations of its potential worth. For instance, amounts such as £700 may reflect depreciation, while £1,000 or £1,100 could indicate corrected valuations or estimates that go beyond the actual market value or replacement cost principles of indemnity. As a result, the determined value of £800 accurately aligns with the necessary compensation according to insurance valuation standards.