Valuable Papers Not Considered Raw Materials

August 28, 2012

An insured has $50,000 limits in valuable papers coverage and has received a restoration quote of $700,000. If the valuable papers are not restored, they become valued as blank paper—$85,000 based on today's paper prices. The insured received the $50,000 for the valuable papers claim but would like to make an additional claim on the excess $35,000 as lost paper, not valuable papers, even though there is print on these papers. Can the insured make a claim on these printed documents for the value of the paper? These pages cost money before they were printed on. It seems that, at least, these printed documents should have value to them, not a restoration value but a raw material value.

Michigan Subscriber

You make an interesting argument here, but it is our opinion that the remaining $35,000 could not be covered as lost paper. The valuable papers coverage provides a limited amount of coverage when the information on the papers cannot be recovered or recreated. However, that does not automatically transfer over to the business personal property coverage. The papers that were lost were not blank pages ready to be printed on, but were already used paper. So, they would not be considered a loss of raw materials because they could not be used as, say, copy or printer paper, as they already had printing on them.

 

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