1. Forms
2. IH
3. IH-99-08

What the form is

The IH 99 08 Value Reporting Form is an endorsement used in Inland Marine insurance. Its primary purpose is to convert a standard insurance policy, which typically has a fixed coverage limit, into a reporting form policy. This means that instead of a static limit, the amount of coverage and the premium are based on values that the insured periodically reports to the insurance company. These reporting periods can be daily, weekly, monthly, quarterly, or on a policy year basis, depending on the specific terms agreed upon and the nature of the insured property. This form is particularly useful when the value of the covered property fluctuates significantly over time.

Classes of business it applies to

This endorsement is versatile and can be applied to various Inland Marine classes of business where property values are not constant. Real-world examples include:

• Fine Arts Museums: Museums often have rotating exhibitions or acquisitions, causing the total value of art on premises or in transit to change. The IH 99 08 allows them to report these changing values.
• Motor Truck Cargo Carriers: The value of goods a trucker is hauling can vary greatly from one day to the next. This form helps adjust coverage based on the actual values being transported.
• Machinery and Equipment Dealers/Users: Businesses that own or are responsible for mobile machinery and equipment (like construction equipment) may have varying amounts of equipment at different locations or overall values that change.
• Marine Supplies Dealers: Dealers whose inventory of marine supplies fluctuates would benefit from reporting values.
• Jewelers Block: Jewelers, especially manufacturers, wholesalers, and large retailers, often have significant fluctuations in their stock values due to new acquisitions, sales, or seasonal demands.
• Radio and Television Towers and Equipment: Businesses with such equipment might use this form if values change.

Special considerations

There are several important points to consider when using the IH 99 08:

• Reporting Accuracy and Timeliness: The insured is obligated to submit accurate value reports by the agreed-upon deadlines. Failure to do so can have significant consequences, potentially leading to underinsurance or claim penalties if a loss occurs.
• Impact on Coinsurance: When this endorsement is used, the standard coinsurance clause may be replaced or modified. The Declarations page will often show specific symbols (e.g., DR for daily, WR for weekly, MR for monthly, QR for quarterly, PR for policy year) in place of a coinsurance percentage, indicating the reporting terms.
• Premium Adjustments: The final premium for the policy period is typically adjusted based on the actual values reported. An advance premium is usually paid, and then an adjustment is made at the end of the term or periodically.
• Underlying Coverage Form: The IH 99 08 modifies an existing coverage form. The terms, conditions, and exclusions of that underlying form still apply unless specifically amended by this endorsement.

Key information for agents and underwriters

Agents and underwriters should be mindful of the following:

• Suitability: This form is best suited for insureds with demonstrably fluctuating values. For businesses with stable values, a standard, non-reporting policy may be more appropriate.
• Risk Assessment: Underwriters need to assess the insured's record-keeping practices and ability to comply with reporting requirements. Poor record-keeping can lead to inaccurate reports and subsequent coverage issues.
• Setting Reporting Terms: The frequency of reporting should align with the volatility of the insured's values. More frequent reporting is better for highly volatile values.
• Explaining the Process: Agents must clearly explain the reporting process, the importance of accuracy, and the potential consequences of non-compliance to the insured. This includes how late reporting or under-reporting can affect claim payments.
• Premium Calculation: Ensure the insured understands how the provisional premium is calculated and how final premium adjustments will be handled based on the reported values.
• Coverage Gaps: Be aware that if reports are not filed, or are filed incorrectly, there could be a gap in coverage or a penalty applied at the time of loss, often referred to as a "Full Reporting" or "Honesty" clause, where recovery might be limited to the proportion that the last reported values bear to the actual values on hand at that time.