<p><span style="font-family:times new roman,serif; font-size:10.0pt">It is agreed that the basis of indemnity under this policy is replacement cost and it is warranted that the sum insured shall be equal to the cost of replacement including freight and duties, if any. </span></p>

<p><span style="font-family:times new roman,serif; font-size:10.0pt">If the sum insured on the property is less than the amount required to be insured thereon, the Company will pay only in such proportion as the sum insured bears to the amount required to be insured. Every item, if more than one, shall be separately subject to this condition. </span></p>

<p><span style="font-family:times new roman,serif; font-size:10.0pt">The Company shall waive the operation of this condition if the sum insured is in accordance with the aforesaid requirement on the date of inception of the present insurance, provided that :-</span></p>

<p><span style="font-family:times new roman,serif; font-size:10.0pt">a) If in the event of a loss, it be revealed that the sum insured on any time of the insured property is greater than the amount required to be insured, the insured shall be called upon the increase or decrease the insurance to be the proper figure from the commencement of the present insurance and an adjustment of the premium under this policy shall take place. </span></p>

<p><span style="font-family:times new roman,serif; font-size:10.0pt">b) A similar adjustment may likewise be required by the insurer in the event of any material variation in prices during the currency from the date of such variation. </span></p>

<p><span style="font-family:times new roman,serif; font-size:10.0pt">If the Insured fails to increase the sum insured on any item within one (1) month of a written request to do so by the insurer, the Insured shall forfeit the benefit of this waiver.</span></p>
