Mick Jagger sang that “time is on my side.” That is not true when it comes to insurance policies. At 2 PM EST today, Merlin Law Group Attorney Larry Bache and yours truly will discuss those important and often overlooked time frames for repair and replacement required under insurance policies.
This is the third discussion about “time traps” that prevent policyholders from recovering following a loss. We will recap those lessons and then quickly delve into the rules regarding replacement and repair.
I usually think of property insurance as the product which is supposed to provide prompt payment and be the financing mechanism for repair and replacement. Most policyholders want assurance about what the insurer will pay/finance. An IRMI article discusses this dilemma:
Most replacement cost policies require the insurer to pay actual cash value (ACV) once that value has been determined. They also require the policyholder to actually repair or replace before the difference between ACV and the full cost to repair or replace (the replacement cost value or RCV) is due and owing. Most insureds do not have the wherewithal to complete repairs without the proceeds of their property insurance policy. Most policyholders are unable and unwilling to begin a substantial repair project without the ACV payment and an agreement by the insurer as to the amount of RCV and that the insurer will pay it when due.1
This is an important post-loss topic – especially dealing with delays caused by adjustment actions or dispute resolution. Yet, it is often an overlooked part of the coverage analysis.
We have a great set of handouts on the topic and a PowerPoint presentation highlighting the important considerations while time is ticking following the loss.
Here is a link to join us today at 2 PM.
1 Jay M. Levin. Requiring Repair before Insurer Pays Replacement Cost. IRMI, Oct. 10, 2010. https://www.irmi.com/articles/expert-commentary/requiring-repair-before-insurer-pays-replacement-cost