When setting the value for the equipment coverage, should all of the equipment be insured and should an amount equal to book value (includes depreciation) or replacement cost value be chosen?
Because the policy has a 100% co-insurance requirement, the sports organization is obligated to insure 100% of its equipment. In addition, the values must be based on replacement cost valuation. This means that they should insure the equipment for an amount that would replace such equipment with a brand new piece of equipment at today’s prices. Failure to meet the policy’s 100% co-insurance requirement based on replacement cost can result in a reduced payout when a claim is filed for a partial loss.
Related Questions
- When setting the value for the equipment coverage, should all of the equipment be insured and should an amount equal to book value (includes depreciation) or replacement cost value be chosen?
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