Page 238 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

sale value as they would be dependent on the value
of the site, location, nearby facilities etc, which do
not have any 'value' for insurance purposes. So, in
case of buildings, the indemnity is provided on the
basis of cost of reimbursement or reconstruction of
the building.

This is determined with respect to materials and labour
cost at the time and place of loss, plus other professional
and incidental charges. Any increase in cost subsequent
to the date of loss or any overtime cost to expedite the
construction process would not be strictly recoverable.

However, if such expenses reduces the overall costs or
prevent aggravation of the loss, the insurers may
consider the reimbursement. For e.g, temporary repair
costs done to prevent further damages . Since a new
structure is always better than the old one, a deduction
for depreciation is made.

However, if the building was fairly new and well

maintained a lesser depreciation is deducted. For a poorly

maintained or dilapidated building obviously the

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