The scenario is common. A piece of equipment (medical, manufacturing, communication) is damaged by an external electrical trauma such as lightning or a power anomaly. Your insured will oftentimes provide a quotation for a replacement system. The claims handler often performs research to determine if the claimed replacement is of a like kind and quality when compared to the claimed system. 

For this example, let us presume the claims handler validates that damaged Equipment A is appropriately replaced with Equipment B, updated/upgraded only as time and technology mandate. Henceforth, we have a well-documented file, the insured can be paid, and we’ve made a proper adjustment, correct? Maybe…or maybe not.

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