Since the definition of “your personal property” in the 1990 and 1991 forms includes “leased personal property for which the insured has a contractual responsibility to insure…,” is it necessary to attach the CP 14 60 to revise the valuation of this leased property from actual cash value to replacement cost? We have always used this endorsement because “personal property of others” is not on a replacement cost basis, and most leases require the insured to “replace” the property in the event of loss. Is it still necessary to add this endorsement in order to get replacement cost coverage for leased property?

Alabama Subscriber

A

In the opinion of the editors, if leased equipment is included under “your business personal property,” then leased equipment should be treated as any other property covered there under. Logically, if the insured has selected the optional coverage for replacement cost valuation of the insured's personal property, that valuation should also apply to leased property covered as “your business personal property.”

Endorsement CP 14 60, on which you have relied to provide replacement cost, does not explicitly state that it changes the valuation to replacement cost; instead it provides that “your business property” is revised to include personal property of others in the insured's care, custody, or control under written leases. Whatever valuation applies to business personal property, whether replacement cost or actual cash value, applies to leased property.

In some cases the lease agreement will specify a certain amount for which the leased equipment must be insured. In that case, the agreed value option of endorsement CP 14 60 must be used.