What it does
CP 04 39 applies to items of personal property described in its Schedule under CP 00 10, CP 00 17 or CP 00 18. The scheduled limit is the only limit for those items, and the coinsurance and normal valuation conditions do not apply to them. If the insured contracts to repair or replace for the same use within 180 days (unless otherwise agreed), the insurer pays the smallest of:
- The scheduled limit.
- The cost to replace on the same site with the most closely equivalent property available.
- The amount actually spent.
If the insured does not repair or replace, payment is the smallest of the limit, the "market value", or repair or replacement with like kind and quality less depreciation. "Market value" means the price the property would bring if offered for sale in a fair market.
Who needs it
Insureds whose equipment is no longer made, or whose replacement cost for identical new items would far exceed what they would actually buy after a loss. It lets the insured carry a realistic limit without a coinsurance penalty.
Quoting and selling notes
- "Stock" is excluded from this endorsement by its title. Inventory stays on regular valuation.
- Explain that a functional equivalent, not an exact replica, will be provided.
- The companion building endorsement is CP 04 38 (Functional Building Valuation).
