Page 15 - Fire Insurance Ebook IC 57

The Insurance Times

policy is not transferred automatically.

Q4. Discuss the concept of reinstatement value.

Ans. Reinstatement value 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 Reinstated
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.

Stocks:- (i) Raw Material - Market Value, i.e the cost at
which the insured can purchase it in the

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