It can be worked to the owner/operator's advantage, though: some years ago a certain Police Air Wing (not a hundred miles from here
) wrote off a Squirrel, which was actually insured for the full replacement value. Force Command wanted the money, which would go back into general revenue and not on a replacement AS350.
A quiet word with the insurers saw the fine print invoked, and they replaced the write off with an equivalent machine for less cost, rather than pay out the claim and lose the aircraft to the air wing.
So I'm told, of course: this is a rumour network
