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Financial advisory
RES5Financial Advisory Services✓A policyholder insures to indemnity (depreciated) value but the policy settles on a reinstatement basis. What is the consequence?
The sum-insured basis must match the settlement basis; insuring to depreciated indemnity value while settling new-for-old leaves the property underinsured relative to reinstatement cost, so average applies.
Assuming the settlement basis and sum-insured basis are independent of each other.
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