This week in my series on calculating actual cash value, we will look at the Mountain State, West Virginia, whose motto is Montani semper liberi (Mountaineers are always free).

In Board of Ed. of Hancock County v. Hartford Fire Insurance Company,1 the insured’s policy covered an old school building that was completely destroyed by fire. Before the fire, the Board of Education had contracted to have the building demolished and had totally vacated the building.

The following issue was before the court:

[W]hether the term used in the standard form of fire insurance policies of ‘actual cash value (ascertained with proper deductions for depreciation)’, on the state of facts before us justifies a recovery of what may be termed ‘going value’, or restricts that right of recovery to the value of the material destroyed, eliminating entirely the costs of construction.2

The court held that here, when the insured stopped using the building and began preparing for physical demolition and construction of a new building, recovery was limited to the salvage of the building.3

It noted, permitting “speculative, collateral questions, including the intended destruction, to enter into the ascertainment of actual value … would multiply litigation and unnecessarily complicate insurance adjustments.”4
1 Board of Ed. of Hancock County v. Hartford Fire Ins. Co., 19 S.E.2d 448 (1942).
2 Id. at 449.
3 Id.
4 Id. at 450.