What it does
IH 99 07 appears in carrier schedules as the Replacement Cost endorsement, 04 03 edition. The Commercial Inland Marine Conditions value property at the least of actual cash value, restoration cost or replacement with substantially identical property; a replacement cost endorsement substitutes cost to replace without deduction for depreciation.
Who needs it
Insureds with newer equipment who would face large depreciation deductions after a loss.
Quoting and selling notes
Ask about equipment age and values. IH 00 68 (05 17) already contains an optional replacement cost provision for equipment up to five years old if shown in the declarations; confirm which approach the carrier uses. Replacement cost usually pays only when the property is actually replaced.
Before presenting it
Ask the carrier for the specimen of this endorsement and read it with the coverage form it modifies, since the endorsement only changes the provisions it names. Note it on the proposal so the insured knows how it changes the base form.
