Page 12 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

arrived at by deducting suitable depreciation for
age, usage, wear and tear etc, from the current
replacement costs. In all the cases, depreciation
refers to the actual intrinsic physical depreciation
and not those used for accounting purposes.

(C) Reinstatement value - This is the value at which the
damaged property can be reinstated or replaced by a
similar property, without deducting depreciation. Agreed
value is also sometimes mutually agreed upon by the
insured and the insurer, subject to the valuation
certificate. Following are the basis on which the sum
insured can be fixed:

Property:- (i) Buildings, Plant, Machinery and Accessories
Fixtures, Furniture & Fittings, Electrical
Installations - Market Value or Reinstatement
Value

(ii) Other Contents like household effects and
contents in shops, etc - Market Value.

(iii) Properties whose market value cannot be
ascertained, e.g, works of Art, Manuscripts,
Obsolete Machinery, etc. - Agreed Value.

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