Broad evidence rule,
Definition of Broad evidence rule:
The broad evidence rule is used by insurance companies to determine the dollar amount to be paid out to the insured in the event of a claim. As opposed to using the traditional actual cash value approach of replacement cost minus depreciation, the broad evidence rule can take into account many factors, including market value, original cost, replacement cost, age and condition of the property, location, frequency of use, durability of the item, assessed value, number of users in the household or business, offers to sell, offers to purchase, and rarity. Because of this, each actual cash value determination must be assessed on a claim-by-claim basis.
The broad evidence rule outlines the guidelines that insurers must go about in determining the value of lost, stolen, or damaged property. It does not specify any one method to value any one piece of property, only that the method which most accurately represents the true cash value of the property should be used. The broad evidence rule means that all facts and circumstances that bear on the value of property can be considered.
Rule applied to calculating the actual cash value of lost property. Under this rule, any evidence about the value of the item in considered admissible. The items value can also be determined by any means that accurately depicts its true value.
Meaning of Broad evidence rule & Broad evidence rule Definition