What is the Day One basis of cover?

The “Day One” basis of cover is the usual way of insuring buildings and this simply means that the building reinstatement value (known as the Declared Value), should exclude any provision for inflation. Inflation is automatically catered for by the policy.

A policy issued on a “standard” reinstatement basis, on the other hand, will require the building reinstatement value (Sum Insured), to include an allowance for inflation for the anticipated duration of the reinstatement period following a claim. When making this calculation, consideration that the loss may occur on the last day of the policy year is advisable.


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