Broad Evidence Rule
Categories: Insurance, Regulations
A guideline stating that insurers should use the most accurate estimate of the true cash value of an asset.
When Bobby’s bicycle was stolen, his insurance agent asked about the age of the bike, wear-and-tear it had experienced, and the existence of major damage. Since Bobby claimed not to remember the bike’s age (it was 12 years old), usage (several X-Games), or condition (missing a handlebar), the insurance company noted that the broad evidence rule called for using the price of a brand new bicycle as an estimate for how much Bobby would need to replace his stolen item.
