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The cost of building repairs or replacement does not include the increased cost attributable to enforcement of or compliance with any ordinance or law regulating the construction, use or repair of any property. However, the following property will be valued at the actual cash value, even when attached to the building: (1) Awnings or floor coverings; (2) Appliances for refrigerating, ventilating, cooking, dishwashing or laundering; or (3) Outdoor equipment or furniture. c. "Stock" you have sold but not delivered at the selling price less discounts and expenses you otherwise would have had. d. Glass at the cost of replacement with safety -glazing material if required by law. e. Tenants' Improvements and Betterments at: (1) Actual cash value of the lost or damaged property if you make repairs promptly. (2) A proportion of your original cost if you do not make repairs promptly. We will determine the proportionate value as follows: (a) Multiply the original cost by the number of days from the loss or damage to the expiration of the lease; and (b) Divide the amount determined in (a) above by the number of days from the installation of improvements to the expirationof the lease. If your lease contains a renewal option, the expiration of the renewal option period will replace the expiration of the lease in this procedure. (3) Nothing if others pay for repairs or replacement. F. Additional Conditions The following conditions apply in addition to the Common Policy Conditions and the Commercial Property Conditions: 1. Coinsurance If a Coinsurance percentage is shown in the Declarations, the following condition applies: a. We will not pay the full amount of any loss if the value of Covered Property at the time of loss times the Coinsurance percentage shown for it in the Declarations is greater than the Limit of Insurance for the property. Instead, we will determine the most we will pay using the following steps: (1) Multiply the value of Covered Property at the time of loss by the Coinsurance percentage; (2) Divide the Limit of Insurance of the property by the figure determined in Step (1); (3) Multiply the total amount of loss, before the application of any deductible, by the figure determined in Step (2); and (4) Subtract the deductible from the figure determined in Step (3). We will pay the amount determined in Step (4) or the Limit of Insurance, whichever is less. For the remainder, you will either have to rely on other insurance or absorb the loss yourself. Example 1 (Underinsurance) When: The value of the property is: $ 250,000 The Coinsurance percentage for it is: 80% The Limit of Insurance for it is: $ 100,000 The Deductible is: $ 250 The amount of loss is: $ 40,000 Step (1): $250,000 x 80%= $200,000 (the minimum amount of insurance to meet your Coinsurance requirements) Step (2): $100,000 , $200,000 = .50 Step (3): $40,000 x .50= $20,000 Step (4): $20,000 — $250= $19,750 We will pay no more than $19,750.The remaining $20,250 is not covered. Example 2 (Adequate Insurance) When: The value of the propertyis: $ 250,000 The Coinsurance percentage for it is: 80% The Limit of Insurance for it is: $ 200,000 The Deductible is: $ 250 The amount of loss is: $ 40,000 The minimum amount of insurance to meet your Coinsurance requirement is $200,000 ($250,000 x 80%). Therefore, the Limit of Insurance in this example is adequate, and no penalty applies. We will pay no more than $39,750 ($40,000 amount of loss minus the deductible of $250). CP 00 10 10 12 © Insurance Services Office,lnc., 2011 �oRaN } r RiskMmVmedDMsfan REVIEWED & APPROVED BY.- f R. Vj&wd Risk Management Analyst