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Ins. Co. Balking at Paying in Full - Owner Has Replacement Ins.

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davidlt77

Junior Member
What is the name of your state? Alabama

My in-laws house was gutted by fire, and they have replacement insurance, but the insurance company is depreciating all their belongings that were lost. Can they do this?
 


You will have to know for sure that they do have replacement cost on the contents & read the policy.

Are they trying to depreciate EVERYTHING or just select things?
 

davidlt77

Junior Member
I know they have replacement insurance on the contents. I think this extends to the house, as well, but the element of concern is the contents. They're depreciating everything with the caveat that they will fully reimburse for any items that are bought again. For instance, if a computer was $1,000, and the insurance company only gave $600 for it, they would give the remaining $400 upon proof that the computer was replaced.

A guy I know said his insurance company tried to pull this same sort of boloney, even though he has replacement insurance. He said that once he had a lawyer tell him the insurance company couldn't do this, the insurance company backed down and reimbursed him fully.
 
Your in-laws need to talk with their insurance agent about what kind of policy they have & how it reads.

Did your in-laws give the company or agent a list of items that were in the house? Just because they may have $50k in replacement cost contents, doesn't mean that they will get it all. They have to prove it.

The insurance company is not depreciating the items - they are holding back a portion of the money until the items are replaced. This is the way that most companies do things. They do it to protect themselves from people getting money & "running".

The only other thing would be to contact an attorney like your friend did, contact the division of insurance or replace the items & get the holdback money.
 

tammy8

Senior Member
So have them start buying things and turning in receipts to the insurance company. BTW electronics are unusual because the same TV you paid $400 for 2 yrs is replaceable at about $200 today for the same TV. Most everything else is replacement cost once the items have been replaced.
 

claimlaw

Member
All replacement cost coverages are paid on the basis of ACV first.

Practically speaking there is no such thing as "guaranteed replacement cost coverage" particularly on contents. It is mathmatically and contractually impossible to recover all "recoverable" or "withheld" depreciation.

Alabama does not recognize Public Adjusters so you are somewhat on your own. An insurance defense lawyer may be willing to take a plaintiffs case however. Alabama, as of a few years ago, didn't require prospective lawyers to graduate from law school as a prerequisite to taking the bar. I'm not clear intirely on what that means about advocates in Alabama but it doesn't make me comfortable.

Good luck.
 

alexchel

Junior Member
ACV/replacement cost contents

Florida

The arguement above is the same we get here. I am told by my public adjuster that the insurance company is betting you won't replace everything and they will come out ahead.

Where this gets unworkable is when there is a disaster and everyone is in temporary housing normally a fraction of the size of their home. The home will take years to rebuild, but the policy has a time constraint of 12 -18 months.

Hurricane Opal presented this little problem for me. The flood adjusters and the wind adjusters managed to discuss each item for so long that reimbursement never happened. The tedium of record keeping is also a bit much, but I am told this is the way it is.

Alexchel@aol.com
 

Mr. Ricco

Junior Member
babymakesone said:
Your in-laws need to talk with their insurance agent about what kind of policy they have & how it reads.

The insurance company is not depreciating the items - they are holding back a portion of the money until the items are replaced. This is the way that most companies do things.]


Ofcourse they are taking depreciation. Property policies with replacement cost coverage don't pay replacement cost until you prove you replaced the item; they pay actual cash value only.
And yes, if they have RC coverage on contents they undoubtedly have it on their home as well.

They need to read their policy from front to back. If they don't understand something, ask for a meeting with the adjuster so they can show them in their policy why they are doing what they are. If that doesn't explain the situation, see a lawyer.
 

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