Insurance Claims - Building & Real Property - Part II

Published: 02nd October 2010
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This reasoning was followed to achieve the opposite result in Exchange Theatre Ltd. v. Iron Trades Mutual Insurance Co. Ltd. [1983] 1 Lloyd's Rep 674. The insured operated a Victorian hall for bingo and discotheque gatherings and, following damage, the court held that the insured's needs could be discharged by a modern equivalent rather than the cost of reproducing the splendour of the Victorian hall itself.

Further, the court will consider the cost of reinstatement and the market value of the property and will only require the insurer to pay a sum for reinstatement provided it is reasonable. The insured need not accept a shoddy job or an inferior building but cannot insist upon complete and meticulous restoration when a reasonable building owner would be content with less extensive work (Dodd Properties (Kent) Ltd. v. Canterbury City Council [1979] 2 All ER 118). Further, the cost of reinstatement or the physical reinstatement itself must clearly be adequate to comply with current building or other relevant regulations.

Paragraph (c) above can be demonstrated by Leppard v. Excess Insurance Co. [1979] 2 All ER 668 in which the market value of a cottage was approximately half its reinstatement value. Insurers proved that the insured had intended to sell the cottage prior to the loss and the court agreed that all he had lost was its market value, which is what he was awarded. Where the insurer contends that market value is the measure of indemnity, then it must prove that there is a market for the building in question and the level of value in that market. This is easy to do where a sale price had been agreed before the loss.

Willis J. Watson is a freelance writer since 2006, living in United States and he writes about he enjoys the policies. If you want to read more informations about Landlord Insurance Quote and also read more reviews about Commercial Insurance Quotes, you can check out his websites.

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