Restitution can be compensation or compensation.
Compensation is the action and effect of compensating . This verb, originating from a Latin word, refers to repairing , compensating or compensating for damage or harm . Compensation, therefore, is a reparation , compensation or indemnity .
Some examples in which the concept is used are the following: «The company's conduct generated significant damage to the workers , who have the right to demand compensation» , «I suggest that you comply with the agreement or I will be forced to call to my lawyer to claim compensation," "They didn't give me the room I had reserved since it was being remodeled, but at least they gave me a night's stay as compensation."
Compensation in the insurance industry
The notion of compensation is common in the field of insurance . Insurance contracts imply reciprocal obligations and rights for the insurer (the company that provides the service) and the insured (the person who contracts it).
The logic of the policies assumes that the insured pays a premium to obtain compensation in the event of suffering some type of damage. This means that if a person insures their house against all risks and it catches fire, the insurer must compensate its client.
Compensation, in any case, is usually understood as a repair carried out by the person who commits the damage (in the case of the previous example, the insurer did not burn down the house, but rather has the obligation to respond under the policy). If a person carries out work in their home and affects their neighbor, they must compensate them in some way for the damage caused, even if it is involuntary.
Compensation is important in insurance.
The term in the legal field
There is a concept known as compensation for damages that is also simply called compensation, especially in the legal field . This is an action granted to the victim or a creditor to demand part of the amount of money equivalent to all the benefits that have been lost due to a certain action of a specific person.
When we talk about compensation we are referring to the disbursement made by a specific insurance company in compliance with the contract to which an insured has subscribed , or to the payment by the State, in the exercise of its ius imperium .
On the other hand, if we want to clearly define the concept of damage, we will say that it is damage to the creditor's assets; which takes place due to the incorrect actions of the offending party. For example, if a person damages machinery that has been loaned to him, he must pay for the damage caused by paying the money according to the value of said damage.
However, the damage may not be physical ; For example, if a tenant has not been able to pay the last year's rent, the landlord can demand that he pay the full amount of the payments with the threat of evicting him from the property in case of failure to pay said compensation.
There are two types of compensation of this kind: contractual (what a debtor must pay in the event that he does not comply with what was agreed in the contract) and extracontractual (what derives from the intentional or culpable action or omission that is caused by the damage. committed against another person).