Common use of Basis of Settlement Clause in Contracts

Basis of Settlement. Zurich may at its sole discretion, arrange for repair or pay the cost of replacement or repair in respect of the item insured that is lost or damaged. If the item is lost or damaged beyond economical repair, Zurich will pay the agreed value of the item individually listed in the Schedule but not exceeding the fair market value of each item as at the time of damage or loss. The burden of proof shall lay with You to adequately show to Us satisfaction that the individual value given in respect of the insured item represents no more than their current fair market value at the time of damage or loss. For a claim for partial loss or damage to any item insured, Zurich will only pay the reasonable and necessary cost and expenses of restoration and not exceeding the full fair market value or the agreed value of the item whichever is lower. Under this section, the term ‘fair market value’ means the price that would reasonably be expected to be paid for the interest by a willing buyer to a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.