One of the things I enjoy is learning from so many really brilliant people in the insurance coverage business. One of those I am fortunate enough to work with: Ed Eshoo, out of our Chicago office. The other is insurance educator Bill Wilson who writes an extraordinary blog.

This afternoon on Tuesdays at 2 With Chip Merlin, I will be going over the common instances where forfeitures happen with property insurance claims and how to avoid them. Most standard policies require that the cost of replacement take place before insurers must pay more than actual cash value. Those polices also discuss a 180-day time frame.

Ed Eshoo wrote a blog about this in, Replacement Cost Coverage and the 180-Day Notice Requirement. Ed concluded:

Practically speaking, the 180-day notice requirement to receive replacement cost benefits should never be an issue. Most public adjusters I have spoken to have told me that their practice is to notify the insurer in writing well before the 180-day deadline (a) that the insured is making a replacement cost claim and (b) that the insured intends to repair/replace the damage to the insured property. Even if the insured is uncertain as to his or her future plans, I see no downside to giving such notice.

Bill Wilson wrote a blog following a recent FC&S answer to this issue in, The 180 Day ACV vs. RC Notice Myth. The two articles have many similarities and Wilson concluded:

The only time the 180-day limitation is triggered is IF the insured actually requests an initial ACV recovery and that is not the case for these types of claims.

I believe this reading is in keeping with the insured’s reasonable expectations for the coverage their premium paid for, is the proper interpretation as a matter of equity, and is the clear and unambiguous meaning of this language. The RTFP Doctrine prevails.

P.S. Another myth is that the insured must actually replace the property within 180 days of loss in order to recover on a RC basis. That’s not what the policy language above says. The insured only has to provide notice within 180 days that the insured intends to recover on a RC basis.

I hope you read the analysis from both and can attend today’s discussion. Here is the link.