Hi, As per page 23, the replacement value is the cost of a new item reduced to allow for the depreciation on the lost item. However, as per solution of 3.13, for Replacement cover the insurer pays for new replacement items. 1st statement allows depreciation , however, 2nd provide value for new item. Can you please guide? Regards, Ashok
In the Core Reading on page 23 its says the amount paid is either: the replacement value - the cost of new item reduced for depreciation - so this is the indemnity basis OR New for old basis - which is the cost of a brand new item - so this is replacement with a brand new item basis
