Page 96 - Insurance Surveyors Book Ebook IC S01

Survey And Loss Assessment IC-S01

The principal factors taken into consideration for adjusting the assessed gross loss

are some or all from the following list

1. Depreciation / improvement or betterment.

2. Salvage recovery.

3. Under insurance / application of average clause.

4. Excess / franchise limits.

ADJUSTMENT FOR DEPRECIATION :

Depreciation refers to the reduction in value of the property due to wear and tear,

lack of maintenance, obsolescence and other related factors affecting its value' s the

insurance policy is an indemnity contract, it is obvious that the amount of money

payable to the claimant should reflect its value at the time of loss, nothing more

nothing less. Hence if the damaged property is replaced by a better or identical new

property, it is necessary to deduct from the cost of replacing an amount which

reflects the depreciation that the property has suffered.

The surveyor is guided by the two broad aspects of depreciation -

i) due to physical wear and tear dependent on usage and maintenance and

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