The principle of indemnity has been a pivotal topic in insurance cases and treatises, especially in discussions about the meaning of ‘actual cash value’ in policies before the emergence of what are commonly referred to as so called ‘replacement cost’ policies, which dominate the market today. The term ‘so-called’ is deliberately used here to underscore a key aspect of most replacement cost policies: they typically pay only the actual cash value until the actual replacement occurs. This is highlighted in the paper, The Indemnity Principle: From a Financial to a Functional Paradigm, which delves into the historical inadequacies of actual cash value policies in fulfilling policyholders’ needs. It underscores the necessity for a new kind of insurance product, one that guarantees sufficient funds to cover the full cost of replacement or repair as needed. This paper noted:  

Continue Reading Does a Structure Have a Market Value? Arriving at Actual Cash Value In Partial Loss Situations Before Replacement Cost Policies Existed

The concept of actual cash value in relation to indemnity is an important study for anybody analyzing what is owed under a property insurance policy. This post follows yesterday’s discussion about the Indiana Supreme Court case,1 noted in What Does Indemnity Mean in the Context of Actual Cash Value? The Indiana Supreme Court ruled that Indiana would adopt the broad evidence rule to determine actual cash value. It stated that replacement cost less depreciation could be considered.

Continue Reading Actual Cash Value and Indemnity

What does it mean when we say that a property insurance policy is a contract of indemnity? This phrase was often mentioned when older cases analyzed the term “actual cash value.” The concept seems to get lost with the marketing of replacement cost policies. My impression is that we have allowed “actual cash value” to be valued less today because modern insurance practitioners do not understand the term indemnity.

Continue Reading What Does Indemnity Mean in the Context of Actual Cash Value?

One of my favorite sailors and racing companions is Keahi Ho. He is a Maui firefighter and a crew member on Merlin. While fighting fires and saving lives on Maui last week, his home, boat, and car were lost to the fire which destroyed Lahaina and its port.

Continue Reading Has Hawaii Determined a Definition of “Actual Cash Value” Under a Property Insurance Contract?

A very positive aspect of working at Merlin Law Group is working with a lot of passionate attorneys doing the same area of law. As a result, we get to share ideas about the best methods to handle cases and issues arising in the field of property insurance law. We even have a lawyer who is a licensed attorney, Ruck DeMinico, who does not work on any cases as a primary attorney but is a Knowledge Manager to support other lawyers. We can better spot, research, and make the best arguments for our clients.      

Continue Reading Trends of Value and Proving Loss Are Important Issues in 2023

I recently posted about a court in Minnesota permitting the insured to seek the Replacement Cost Value (“RCV”) of its loss even though the property had not been repaired or replaced during ligation delays. Earlier this month, the Florida 11th Judicial Circuit for Miami-Dade County offered the Florida perspective on the subject.1

Continue Reading Florida Law on Post-Loss Obligations and the Recovery of RCV Benefits

I recently posted about a court in Minnesota permitting the insured to seek the Replacement Cost Value (“RCV”) of its loss even though the property had not been repaired or replaced during ligation delays. Earlier this month, the 11th Judicial Circuit for Miami Dade County offered the Florida perspective on the subject.1

Continue Reading Florida Law on Post-Loss Obligations and the Recovery of RCV Benefits