I’ve run into this situation a handful of times recently in the Naples/Fort Myers area following Hurricane Irma. Generally, the policyholder is a retiree with ample spare time on his hands, a bit handy, and takes on the task of performing mostly cosmetic interior repairs himself (e.g., painting, drywall, flooring).
Continue Reading I Performed The Work Myself, Am I Entitled To Labor Costs?

Larry Bache and I are currently handling a devastating fire loss to a powder coating and plating facility located in Watertown, South Dakota. Our clients purchased a replacement cost value policy of insurance – the purpose being to allow them to rebuild after a loss. Unlike actual cash value coverage, which has the intent of placing an insured back in the position it enjoyed prior to a loss, but never allowing it to benefit because a loss occurred, replacement cost coverage is not a pure indemnity agreement. It reimburses an insured for the full cost of repairs, even if that results in placing the insured in a better position than it was before the loss.1
Continue Reading Determining Actual Cash Value in South Dakota

What is the replacement cost value of my classic brown dress shoes? How would you go about determining their actual cash value? You can see them in the photo above along with some Sperry Topsider shoes I have yet to take out of the box. As I am writing this post, I am looking at my Weber gas grill which has been getting a workout since our social distancing started. What questions and considerations should be made for that item in a property insurance adjustment? How are those questions and considerations different when considering replacement cost value and actual cash value if the damage were to real property? What are the considerations if the loss were to a commercial insured rather than covered under a personal property insurance policy?
Continue Reading What Do Chip Merlin’s Old Dress Shoes, New Sailing Shoes, and Weber Grill Have to Do With Replacement Cost Value, Actual Cash Value and Depreciation of Labor?

A class action lawsuit filed against Allstate in South Carolina raises the newly raised practice by some insurers of depreciating labor when repairs are made.1 I thought that the lawsuit was very well plead and was surprised to see citations to a law review article written in part by public adjuster Don Wood, and another citation to the Property Insurance Coverage Law Blog.
Continue Reading Can Labor Be Depreciated? Class Action Lawsuit Cites this Blog!

California is a beautiful state. When I was meeting with our California attorneys and staff at our holiday party, I mentioned that there are so many different and beautiful areas, it is no wonder California is our most populated state. Unfortunately, with wildfires, earthquakes, landslides, and floods, California has its share of insurance problems—especially a recurrent problem of homeowners finding they are underinsured and without sufficient policy limits after large scale catastrophes.
Continue Reading Should Homeowners Policies Have No Policy Limits?

Insurance company adjusters often leave off the reasonably expected acquisition costs when determining replacement cost. While the actual pricing can become theoretical, the bottom line is that these acquisition costs can be a material cost and every adjuster should include them when determining the top line replacement cost value.
Continue Reading All Acquisition Costs Should Be Included For Replacement Cost Values

Many policyholders do not have enough insurance to replace their buildings or homes after a total loss. Often these policyholders were assured by their agents or insurance companies at the point of sale that their limits were sufficient. And many times these assurances were based on estimates that fell below the minimum standards set by law.
Continue Reading California Insurers Are Violating Replacement Cost Estimate Laws

California Insurance Commissioner Ricardo Lara

Many insurance policyholders who have lost homes in the devastating California wildfires call our firm and ask, “Can my insurance company really deduct the value of the land under the replacement home I purchased from my claim payment?” This is a great question because this is now an unlawful tactic by the insurance companies that has unfortunately pervaded this state recently. Finally, last week the California Department of Insurance officially agreed and issued a bulletin explaining why.1 The bulletin is not legally binding, so insurers can still refuse to comply, requiring litigation.
Continue Reading Insurance Companies Cannot Deduct The Cost Of Land From Your Replacement Home Purchase in California

Are California homeowners entitled to collect actual cash value (“ACV”) or replacement cost values (“RCV”) for property claims? It depends on what type of policy you have and whether you suffered a total or partial loss of your property. What’s more, in a few weeks, the California Assembly may vote to change existing law. To understand what homeowners are entitled to, we must first determine whether the policyholder has purchased an RCV or ACV policy and to analyze impact of depreciation.
Continue Reading Potential Changes to California’s Insurance Code Section 2051 Impacts Total loss Valuation on ACV Policies

California has statutory and case law that defines replacement cost and actual cash value, and these laws are read into every insurance policy notwithstanding what the policy language says. This blog has several posts on the subject,1 and this post aims to give you one cohesive post to consult for all your questions on calculating ACV and RCV.
Continue Reading Calculating RCV and ACV for Structures and Personal Property in California in 2019