TRANSIT INSURANCE NOTES.
Page 39
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AUTOMATIC REINSTATEMENT.
'VERY haulier should see L. that his goods-in-transit policy contains att, automatic reinstatement clause. The clause is usually long and closely printed, but it means that in the event of a loss the sum insured will not be reduced by the amount of the loss but will always remain at the constant level stated in the policy.
Where a policy does not contain this clause, it is not hard to visualize the position that might arise in the event of two losses following closely on one another. The first loss might exhaust the entire sum insured and leave no balance whatever to apply to the second claim. In other words, the haulier would have to bear the second claim himself.
But, although this clause gives immediate reinstatement of the sum insured' after a claim, it does not give it free of charge. Some hauliers find it difficult to understand why they have to pay a small extra premium after each claim, but the reason is, simply that as a part of the insurance has been used up so it has to be replaced, just as if it were a fresh insurance altogether.
Any haulier whose policy does not bear this clause should either ask for it to be inserted or ask the insurance company or broker to have the insurance reinstated so soon as possible after any claim occurs. Delay may be costly.