What occurs if a loss is reported after the first report due date under a value reporting coverage form?

When a loss is reported after the first report due date under a value reporting coverage form, it typically results in a limitation on the amount of the loss that can be recovered. The principle behind this limitation is linked to the insurer's need to have accurate and timely data regarding the values at risk, as these values can fluctuate over time.

When an insured does not report a value on time, the insurance company may pay out no more than 75% of the loss. This policy approach incentivizes prompt reporting and ensures that both the insured and insurer maintain accurate records of insured values. This limitation reflects the understanding that the risk associated with inaccurate or outdated data increases, so the insurer protects itself by capping the reimbursement.

In contrast, receiving the full amount of the loss or a predetermined percentage of 75% would not address the risks caused by delayed reporting. Understanding the rationale behind these terms helps policyholders appreciate the importance of adhering to reporting deadlines in value reporting coverage forms.