insurance policy payout

[johnsayegh]

I have an 8 unit brick apartment building, which caught fire jan. 6 2001. my insurance policy was in my name but the property was in my fathers name (deed) because during 1992 I became ill and transfered title to my dad as a precaution against medical expenses. the attorney filed paperwork for conventional transfer of property. This created a large tax liabilty. After explaining and proving to the IRS that the my dad was merely my nominee while my health circumstances were uncertain and two years time to reconcile we finally had the tax liability removed with no exchange of monies. Due to these compilcations I never had the property deeded back to me for fear of creating another tax situation with the IRS. The building is now totally destroyed by fire.
In my converstation with the insurance company's adjuster he stated that the company will pay for the damage less depreciation. I am of the understanding that the insurance should pay the full amount of the policy. The construction appraiser hired by the insurance company and the fire departments report estimate the damage at more than 1 million dollars. The policy is a replacement value policy with a limit of one million and fifty thousand dollars with additional coverage of two hundred fifty thousand for new code construction requirements as well as other coverages. I don't understand why there is a limit on replacement value. I thought i was insured for whatever the cost might be to replace the building. I also don't understand why i am not entitled to the full value of the policy because the damage exceeds the limits.
If someone would kindly explain the formula, limit less depreciation, i would be grateful, because i feel that i should be paid the one million fifty thousand, plus the cost of upgrades in codes.

thanks, john

 

[ALawyer]

This sounds as if it has the making of a bad faith situation, or a bad lack of understanding.

I'd have to read the policy and repacement rider, but if your policy was for a stated amount of $1 million or so, that's what the recovery should be.

On the other hand, if you had a $250,000 policy, even with a replacement value rider, all you paid premium on was $250,000, and that's all you'd get.

The replacement rider would have covered replacement of, say, a $50,000 elevator that originally cost you $10,000, if you had enough insurance on the building. But it doesn't jack up the payment you are entitled to above the coverage you bought and paid for. Unless the rider applies only to contents, and not the building itself, it should cover you (if you had full insurance.)

If the company or agent mislead you that's something else, and a possible basis for a claim.