In Brief
An insured's excavator was damaged in a fire in 2010. The insurance company's surveyor assessed the loss at Rs.25,24,273 after applying depreciation and under-insurance deductions to a figure lower than the policy's agreed sum insured of Rs.46,56,600. The National Commission awarded Rs.34,17,500. The Supreme Court held that absent fraud, coercion, or misrepresentation, insurers are bound by the agreed sum insured and cannot recalculate depreciation for pre-policy periods already reflected in that figure. The Court approved the State Commission's award of Rs.41,90,940 (sum insured minus only 11 months' post-policy depreciation) and restored that decision.
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