News Room

This week we present our final insurance related term and urge you to remain vigilant, ever mindful that the hurricane season has just begun. Our term for this week is Reinstatement.

Reinstatement applies to two broad areas. In the first instance, it applies to property that is lost or destroyed and in the second, to damaged property. Where property is destroyed or lost - it is replaced by like property of commensurate value. Conversely, if it is damaged then the damaged portion is repaired and/or restored. In either case, the replacement or restoration should not lead to an improvement in the value of the item. Alternatively, for household linen and clothing - a deduction for wear and tear will be made where loss or damage occurs. Reinstatement therefore means that you will be returned to the position you were in before the damage or loss.

What does this mean for you?

If you do decide on insuring your contents, you should also insure at the replacement cost as new. For items like computers for example, they become obsolete quickly and therefore a replacement in the near future could be cheaper than the original purchase price. You should consider reducing the sum insured on such items to reflect the actual replacement value and thereby save on your premium payments. On other items however, such as jewelry, the opposite may be true, the replacement price may actually increase over time. Your friends at EC Global Insurance would like to remind you to ensure that your policies are in order and all valuations are up to date. For further information, call one of our agents at 451-3244. Also, ask about our property insurance seminar or log on to www.ecgloablinsurance.com.