Recently, I was asked, “if an insurer initially denies a claim and then later pays or is forced to pay, do they have to pay actual cost value, or replacement cost value?” After a little research on the topic, the old joke, if you ask a lawyer a question, their favorite answer is always, “it depends,” … Continue Reading
Insurance policies may provide several methods to calculate the amount it will pay an insured for a loss. The term replacement cost will be defined or explained in the policy. In a recent federal district court case in Kentucky, Hampton v. Safeco Insurance Company of America,1 the court addressed the meaning of the term “replacement … Continue Reading
Like me, you’ve probably seen Nationwide Insurance’s widely aired commercial touting their service, "Brand New Belongings." The eye-catching ads feature a sleek Cat-Women-like heroine coming to the rescue in every homeowner’s worst nightmare situations, stealthily following behind home-invading thieves to replace the items they steal, or swinging into a fire-damaged apartment to switch out smoke-damaged … Continue Reading
When suing to recoup roof replacement costs in the Lone Star State you need an expert to prove up damages. Texas courts won’t consider a homeowner’s testimony as competent evidence where a roof was replaced and there was a question of the reasonable and necessary cost of the replacement. In Wortham Brothers, Inc. v. Haffner,1 … Continue Reading
New York’s highest court recently held that a policy limitation period, requiring a lawsuit to be brought within two years from the date of loss, is unreasonable and unenforceable…at least under certain circumstances.1… Continue Reading
The last several months I’ve spent the majority of my time on the New Jersey Shore. Among the reconstruction, empty lots, and damaged homes I also see a growing number of “for sale” signs lining the sidewalks. In fact, this was a topic of conversation Tuesday night over dinner with a new client.… Continue Reading
In property insurance claims, insurers will often pay for repairs at actual cash value (withholding depreciation) and inform the policyholder that once the repairs are actually made or contracted for they will pay the holdback amount and receive the replacement cost value (“RCV”). In Florida, residential policyholders insured under replacement cost value policies are entitled … Continue Reading
Some victims of the Ft. Collins and Colorado Springs fires who lost their homes opted to purchase a new home elsewhere. Most of their homeowners policies require their insurance companies to pay Replacement Cost Value (“RCV”), which is “the amount it would have cost to replace an identical structure to the one lost on the … Continue Reading
I am often asked whether an insurer can depreciate overhead, profit, and sales tax when it makes an Actual Cash Value (“ACV”) payment under a Replacement Cost Coverage policy. The thinking goes that only the materials used to build a structure can be depreciated because overhead, profit, and sales tax do not lose value over … Continue Reading
On Sunday, Denver Post business section writer, Steve Raabe, published a good article discussing the obstacles homeowners face when they attempt to use their insurance coverage proceeds to rebuild their home.… Continue Reading
After a property loss occurs, an insured is always responsible to show the amount of loss claimed. We are often asked whether a policy covers "replacement cost" value (RCV) or "actual cost" value (ACV). Although an insured may not be familiar with these terms, the RCV versus ACV valuation of property can determine whether an … Continue Reading
In my last post, Understanding the Importance of “Replacement Cost Value” Coverage, I explained that insurers are not permitted to withhold any depreciation under replacement cost value coverage for personal property claims. This post highlights a recent change to Florida Statute § 627.7011, which took effect May 17, 2011, and alters the payment of dwelling … Continue Reading
In Florida, except under certain circumstances, in an “actual cash value” policy, the carrier withholds depreciation through the indemnification process. For an additional premium amount, policyholders can purchase “replacement cost value” coverage which requires insurance companies to replace the damaged property with the full value of replacement. For example, a television valued at $1,000 is … Continue Reading
In a recent case, a Louisiana Court of Appeal decided, among other issues, what damages policyholders were entitled to in a Hurricane Katrina claim. That sounds like a typical scenario, however to add some spice to the mix, the policyholders had sold the property following the loss. The case is Jouve v. State Farm Fire … Continue Reading
(Note: This Guest Blog is by Erin Kristofco, an attorney with Merlin Law Group in the Denver, Colorado, office). Home and business property owners who suffered hail damage during Colorado’s hail storms must determine whether their property insurance policy requires the insurer to replace not only the hail damaged surface, but also any substrate, insulation … Continue Reading
New York policyholders, Thomas Woodhams and Charlene Connors, filed a claim for replacement cost damages arising out of a fire loss, but Allstate refused to pay the replacement figures. The policyholders brought suit, but the case was dismissed. Now on appeal, United Policyholders filed an amicus curiae brief on behalf of the insureds.… Continue Reading
Replacement cost, actual cash value, and total loss valuation payment definitions, procedures and issues are currently being debated before the Florida legislature. In Draconian Property Insurance Bill Filed in Florida Senate, I explained that the pending legislation was against policyholder interests. Our firm has other posts on this debate: The Industry’s Greatest Fear is an … Continue Reading
Senate Bill 408 proposes new Florida insurance laws that harm all policyholders. Florida businesses and homeowners will receive fewer benefits, and insurers will be encouraged to delay, deny and defend claims if this bill becomes law. It takes away a lot of financial peace of mind that insurance currently provides.… Continue Reading
The Colodny, Fass, Talenfeld, Karlinsky & Abate law firm sent a newsletter regarding Freshman House Representative Frank Artiles’ recent teleconference. In "Freshman State Representative Frank Artiles, a Public Adjuster, Meets With Florida Insurance Industry Representatives On Concerns, Commonalities" the lawfirm noted the following:… Continue Reading
The Tennessee Insurance Litigation Blog has a post, Should a Deductible Be Subtracted in the Case of a Total Loss?, which raises a point that many adjusters seem to miss. I wrote about this topic in When Calculating Insurance Payments, Take the Deductible From the Repair Value and Not the Policy Limits and noted:… Continue Reading
Policyholders with flood and all risk policies usually do not have as many problems collecting benefits following a hurricane where wind and flood damaged a structure. Those with only one policy are not so fortunate. When the combination of payments from both policies is less than the cost to repair or when delays in payments … Continue Reading
During a recent mediation, my client was adamant that he was entitled to sufficient insurance money to repair his home. I informed him that his policy was an Actual Cash Value policy, rather than a Replace Cost Value policy, but my explanation was met with a blank stare. It then occurred to me that perhaps … Continue Reading
Values of loss often have components which seem small but add up to millions of dollars to insurers over the long run. In Holden v. Farmers Ins. Co. of Washington, 2010 WL 3504821 (Wash. Sept. 9, 2010), the Washington Supreme Court affirmed that sales tax should be considered when determining Actual Cash Value. Noting that … Continue Reading
What judges say is contemplated under an insurance policy is not always what adjusters are taught and do in the field. Jeremy Tyler noted in Prevention of Performance with Replacement Cost Value, that a new appellate decision involving QBE rewrites how insurance companies may adjust property losses in Florida. Many will read Buckley Towers Condo., Inc. … Continue Reading
