The Mississippi Department of Insurance just issued a bulletin regarding the depreciation of labor from Actual Cash Value. This is similar to Arkansas which Shane Smith reported in Arkansas Insurance Department Bulletin on Depreciation of Labor.

The department indicated that it will allow the practice of depreciating labor if insurers place their ability to do so into their policies.

I find it very curious that two departments of insurance came out with similar bulletins on this rather esoteric property insurance claims topic within the same week. My guess is that insurance lobbyists for certain carriers that want to sell “cheap” insurance are asking departments for permission to allow policies that will deduct those items so they can pay less on claims or at least increase the amount of “float” until replacement is made.

While curiosity killed the cat,1 I am going to follow up today with calls and possibly emails asking how these bulletins came into existence and how much analysis went into the making of them. I also wonder why Mississippi specifically did not apply the same claims handling practice to automobile policies.

Positive Thought of The Day

“I have no special talents. I am only passionately curious.”
—Albert Einstein
1 Curiosity killed the cat is a proverb used to warn of the dangers of unnecessary investigation.