Gross Value or Net of Depreciated Value of Assets For Insurance Purpose
This query is : Resolved
07 June 2025
Dear Sir,
Please guide - Which amount to be considered for Fire and Perils Insurance of Assets:
1. Gross Value (Actual Cost)
2. Net Value (Gross Value - Depreciation Value)
Thanx
Please guide - Which amount to be considered for Fire and Perils Insurance of Assets:
1. Gross Value (Actual Cost)
2. Net Value (Gross Value - Depreciation Value)
Thanx
07 June 2025
For fire and perils insurance, the sum insured should ideally be based on the gross value or replacement cost value (actual cost to replace the asset) rather than the net value after depreciation.
Insuring at net value (after depreciation) risks underinsurance and inadequate compensation in case of loss.
If the policy is on a reinstatement or replacement cost basis, depreciation is not deducted when settling claims, ensuring full recovery for the insured.
Insuring at net value (after depreciation) risks underinsurance and inadequate compensation in case of loss.
If the policy is on a reinstatement or replacement cost basis, depreciation is not deducted when settling claims, ensuring full recovery for the insured.
28 September 2025
Good luck.....
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