<p>At the option of the Insured, where any Property Insured consists of equipment, machinery or plant having a measurable function, capability or output and if, by reason of the Basis of Settlement Clause, it is necessary to replace such property with a new item or items which perform a similar function or functions, then the Basis of&nbsp;Settlement for such property shall be as follows:&nbsp;</p>

<p>a) Where any property is to be replaced by an item or items which have the same or a lesser total function, capability or output, then the Basis of Settlement is the new installed cost of such replacement item or items that would give the same total function, capability or output as the property being replaced.&nbsp;<br />
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b) Where any property is to be replaced by an item or items (including cost of foundations) which have a greater total function, capability or output and the new&nbsp;installed cost of such replacement item or items is no greater than the replacement value of the property being replaced, then the Basis of Settlement is the new<br />
installed cost of the replacement item or items.&nbsp;<br />
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c) Where any property is to be replaced by an item or items which have a greater total function, capability or output and the new installed cost of such replacement property is greater than the replacement value of the Damaged property, then the Basis of Settlement is the greater of the reinstatement value of the property or that proportion of the new installed cost of the replacement item or items which the output of the Damaged property bears to the output of the replacement item or items.&nbsp;<br />
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Provided that the amount payable shall not be of lesser value than the new installed cost of such replacement item or items that would give the same total function, capability or output as the property being replaced.&nbsp;<br />
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(Partial damage - Replacement Cost Provision) Provided always that where any Damaged property may be properly repaired, the Insurers shall pay the cost of restoration of such Damaged property to a condition substantially the same as (but not better or more extensive than) its condition when new and the liability of the Insurers shall not exceed the stun representing the cost which the Insurers could have been called upon to pay if such property had been totally destroyed.</p>
