What is the replacement cost value of my classic brown dress shoes? How would you go about determining their actual cash value? You can see them in the photo above along with some Sperry Topsider shoes I have yet to take out of the box. As I am writing this post, I am looking at my Weber gas grill which has been getting a workout since our social distancing started. What questions and considerations should be made for that item in a property insurance adjustment? How are those questions and considerations different when considering replacement cost value and actual cash value if the damage were to real property? What are the considerations if the loss were to a commercial insured rather than covered under a personal property insurance policy?
Most policyholders never think about these topics when purchasing insurance. What crazy policyholder would waste their time to study such nuances of property insurance coverage before a loss happens and ask these questions at the point of sale?
What insurance agent would go through these explanations about why one policy provides better coverage than another if a disaster would occur when a not so good agent or insurance advertisement steals business by suggesting, “I have a Replacement Cost Policy and it is a lot cheaper to purchase than the one offered by the good agent?”
Who in the various departments of insurance regulating insurance companies, the agents, and companies selling the insurance, and approving the forms we all rely upon for coverage after the loss occurs is thinking about these concepts and considerations? I am convinced many regulators need better training because they do not know what basic concepts of property insurance coverage to look for. This is not their fault because nothing is set up for regulators to learn the correct concepts of property insurance.
I will challenge those in charge of making up tests for market conduct studies to prove me wrong, but market conduct studies rarely examine these concepts. There are needed changes that should occur by those making up the criteria for market conduct studies to uncover unfair claims practices involving valuation of property insurance claims. I hope those leaders will have an open mind.
Maybe I am just an insurance coverage nerd, but these basic questions are central to what anybody doing property insurance claims work should be thinking about every day because this is what we do, or at least should be doing.
Tomorrow at 2 PM EST, I am going to go over these concepts in a Facebook Livestream. Here is a link to the show. I talked about how fun this will be in Coronavirus Insurance Coverage Law Update March 28–The French Laundry Declaratory Judgment Lawsuit and Farmers “Contamination” Coverage for Restaurants, and Tuesdays At Two With Chip Merlin—An Insurance Coverage Discussion About Property Insurance Claims. You should read these posts if you missed them.
What I have learned after the announcement of these events is that a number of our readers do not know how to access a Facebook live event. That is not embarrassing. Learning comes at different times and through different motivations for everybody. I would suggest those of you who want to get the full benefit and especially some of the documents that are only available to the those who “tune in” live, get with somebody that can show you how to “tune in” to a Facebook livestream or read these instructions to learn how to do this.
If you want to learn in advance and prepare for the livestream tomorrow, I would suggest you use the search function on this blog which is located in the upper right side of the page you are reading. Just type in the three phrases, “replacement cost,” “actual cash value,” and “depreciation of labor’ in separate searches. You will get hundreds of articles on these topics. I even posted instructions on using our search function eleven years ago in, Coverage Issue of “Matching” Roof Tiles or Shingles Shows How to Use the Search Function of this Blog.
Want some information about those old dress shoes? They are Belvedere shoes. They are fantastic shoes. I’ve been told that by shoeshine guys all the time. For me, it really is not about the way they look but how they feel on my feet, as you will learn tomorrow. Here is part of the story about Belvedere shoes:
‘They call me the Gator Man,’ he says with a laugh. ‘I don’t know why … they just do.’ He shakes his head and chuckles again.
Stefano Giovacchini has a thick Italian accent, courtesy of growing up in Florence, Italy. But it’s not just the language and a charming grin that he picked up from home. His passion for luxury footwear blossomed early on, nestled between the tanneries and shoe factories of his youth.
Belvedere’s story began in 1986 when Stefano moved to California to carve out his career in the shoe industry. He started as many entrepreneurs do: in the back of a garage with a phone extension cord stretching from the kitchen. ‘Between you and me,’ he says with amusement. ‘I hear that’s how Google started too, so it’s okay.’
I bought three to four brown pairs of these shoes over approximately the past 10 to 20 years. I am not certain which pair these are. I think I bought one pair at Nordstrom’s in San Francisco, another at the Nordstrom’s in Tampa and another probably in New York City. I have somehow lost all, but this last brown pair.
My approximate guess is that these shoes have been refurbished three to four times at the Leather Spa, located on 55th Street West. The last refurbishment was maybe a year to two years ago. Quality is remembered far after price is forgotten and the price of the refurbishment was usually well in excess of $125.
Similar ostrich leather, but not exactly the same, shoes currently retail on the Belvedere website for $439. I found a similar pair on the internet at $336. I think I paid between $225 to $275 for the pairs I purchased, but that is an uncertain guess. I saw a used pair in black at a different size for sale on eBay at $69.
The Sperry Topsiders were given to me as a present for my birthday a year ago. I have not worn them, and they have stayed in the box since my birthday last year.
We will talk about all of these little factors and many other considerations tomorrow at 2 pm. Hope you can join me, ask questions, and even make some points—I love learning from others and there are a lot of really experienced and bright adjusters who read this blog. After all, who learns the most from teaching—the teacher or the student?
Thought For The Day
The best thing for being sad,” replied Merlin, beginning to puff and blow, “is to learn something. That’s the only thing that never fails. You may grow old and trembling in your anatomies, you may lie awake at night listening to the disorder of your veins, you may miss your only love, you may see the world about you devastated by evil lunatics, or know your honour trampled in the sewers of baser minds. There is only one thing for it then — to learn. Learn why the world wags and what wags it. That is the only thing which the mind can never exhaust, never alienate, never be tortured by, never fear or distrust, and never dream of regretting. Learning is the only thing for you. Look what a lot of things there are to learn.
― T.H. White, The Once and Future King