'The contract, moreover,—whether At applies to buildings or machinery, for both,—is based upon the under' Btanding that it is the insured's "intention to reinstate. That is a Mital condition of the contract, for pathing can be recovered under the Policy uni che inured has actualy] incurred the costs of reinstatement, fand then only the actual amount expended, within the limit of the ipum insured. If the insured does bhat reinstate, and does not intend to reinstate, the policy remains tive, "or if reinstatement value is insured by an extension of the ordinary fire policy, the company fs liable only for the' actual value
ire.
She peony ut Sri San When @ separate policy is issued] to cover the increased cost of reinstatement, it-contains a condition Fequiting the insured to keep the property. insured against loss damage by fire under the ordinary Policy, and no payment under the Foinstatement policy can be made unless and until the insurers upon the fire policy "shall have paid for or admitted Lisbility in respect of the loss of or damage to the property by fire." This is apparently considered necessary, seeing that the reinstatement policy is a sup-Plemientary contract to the fire Policy, operating to indemnify the insured for a loss he is unable to Fecover under the fire policy.
"If the reinstatement policy ts] Intended to apply to a loss which Vos outside the scope of the fro] Policy, and which, therefore, under hho circumstances could be recovered under the fire policy, it is not quite clear why the condition should necessary. If the reinstatement is liable for the difference between the factual value and the Intatoment, it should mai ence to n reinstatement contract whether the ordinary fire loss is covered or not. It may be consid ed expedient however, to make some stipulation such as this requiring the property to be insured for ordinary fire loss, in order to avoid difficulty, fu adjusting a loss, for an_insurod who is uninsured for the fire loss might in the hope of recovering 9 part of his uninsured loss from the reinstatement policy purposely. value the property under its actual value. The application of average, however, fu a case of this sort would defeat the insured's purpose. A reinstatement policy relates to the same perils as those provided for under fire policy, and consequently, if the} ordinary fire loss is not covered by tthe fire policy, the reinstatement loss
Text read from the printed page and cleaned; old type leaves the occasional error.