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Three issues were considered by the Court of Appeal in Endurance Corporate Capital Ltd v Sartex Quilts & Textiles Ltd1 concerning assessment of loss in a claim under a property insurance policy: (1) where reinstatement work has not been undertaken does the insured have to intend to reinstate the property to qualify for costs of reinstatement? (2) is the insured entitled to costs of reinstatement where the building is being rebuilt or repaired in a different way or place than before the casualty? (3) should there be a reduction in the entitlement of the insured to payment to make allowance for betterment?
The answers provided by the Court were: (1) not as a rule,2 though exceptionally the existence or otherwise of intent to reinstate may be relevant;3 (2) yes;4 (3) if betterment results from the insured’s choice, yes, and, if it is not the insured’s choice, still yes if there is a pecuniary benefit to the insured but no if there is only a non-pecuniary benefit.5
In the judgment of Leggatt LJ6 on the first of these issues, the approach taken in assessing loss in property insurance cases was merged with how loss is assessed in breach of ordinary (non-insurance) contract cases involving property damage and property defects,7 with the result that principles of mitigation of loss were apparently rendered relevant.