Page 316 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

(iv) Automatic reinstatement of the sum insured is
possible, after deducting pro-rata claim from the
date of loss to the date of expiry of the policy.

(v) If, however, the insured exercises his option of
not reinstating his policy, the sum insured shall
stand reduced by the amount of the loss.

(j) Variations (for trend/variations) - If the books
of account show that the annual turnover during the
last financial year was greater than the turnover
during the last financial year, i.e, shows an upward
trend, then if the insured can prove that the upward
trend would have continued, had there been no fire,
then the upward trend would be taken into account
in adjusting the loss.

In a declining business, the trend would be a
downward one and hence the corresponding
adjustment would be made accordingly.

So, a trend whether upward or downward must have

to be taken into account when arriving at the rate of

gross profit.

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