Page 49 - Fire Insurance Ebook IC 57

The Insurance Times

Debris removal (in excess of 1%)

The fire policy covers debris removal fees only upto 1% of the claim
amount. On payment of additional premium this limit may be increased
from 1%.

Reinstatement value policies

n The purpose of reinstatement value policy is to reinstate the
property of the insured in the condition it was just before the
loss. In these kind of policies the principle of indemnity is not
adhered to strict sense.

n This policy issued in respect of building, plant, machinery,
furniture, fixture and fittings only and not on stocks.

n This policy differs from the fire policy in the basis of fixing the
sum insured and settlement of claims.

Difference between fire and reinstatement value policy

Fire policy Reinstatement value policy

Under the fire policy claims Under the reinstatement value
are settled on the basis of the policy the payment to be made is
market value of the insured the cost of reinstatement of the
property immediately before building or the cost of replacement
the fire. of the machinery to a condition
equal to (but not better than) its
condition when new.

This value is arrived at strictly Principle of indemnity is not
according to the principle of followed in a strict sense.
indemnity, that is by taking
into account depreciation,
wear and tear, etc.

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