What is ‘a broad understanding of evidence’
A broad rule of evidence sets out the guidelines insurers must go about in determining the value of lost, stolen or damaged property. It does not specify any one method to value any piece of real estate, only that method which most accurately reflects the true cash value of the property, should be used. Broad evidence rule means that all facts and circumstances affecting the value of property may be considered.
Breaking down ‘the General rule of evidence’
The broad evidence rule is used by insurance companies to determine the dollar amount that must be paid to the insured in the event of a claim. Unlike the use of traditional actual cost approach the replacement cost minus the depreciation, the broad evidence rule can take into account many factors, including the market value, original cost, replacement cost, age and condition of the property, location, frequency of use, the durability of the product, estimated cost, number of users per household or business, offers to sell, offers to buy rare. Because of this, each actual definition of a cash equivalent, should be evaluated on a claim by claim basis.
States use three different approaches to calculate the actual cash value when the policy of the hotel not adequately define the term Fair market value, replacement cost minus depreciation and the General rule of proof. Starting in 2016, the General rule of evidence was taken in 23 States, including new York and new Jersey. It has become more common in recent years, although in some States, like California, specify that the actual value is equal to market value.
The pros and cons of the General rule of evidence
The strength of the broad evidence rule is its openness and flexibility. He received high marks for indemnity to the insured by a more equitable distribution of insurance payments than the results of other approaches. This is because the insured person can provide evidence of the discrepancy between market value or replacement cost minus depreciation approach in certain cases.
Some critical remarks on the General rule of evidence provide that it lacks certainty and predictability, because this is not a definite formula. When you bought insurance, no calculations regarding the value of the property. Therefore, the rule imposes an additional burden on insurers and judicial systems, as it requires more administrative complexity and time than other approaches. Further criticism of the General rule says that insurers can take advantage of the issues of security to avoid liability. Another complaint is that the attention of an indefinite number of factors can lead to speculation and clouding the issue of actual loss.