What is the name of your state? NC
Hey all, I have been trying to close a HO7 Enhanced Coverage Homeowner Policy claim in NC for damage caused by neighbors trees. The auto and personal property claims have settled. The actual cash value (ACV) for all damage repairs related to the dwelling and outbuilding (shed) claims has been paid by the Ins. Co. The final payment has come down to a question related to recoverable depreciation (RCV) holdback. There was RCV included on two items in the dwelling repair estimates related to roofing material and repair/replacement of the shed. The RCV and holdback amounts are noted as separate line items on the estimates.
The Ins. Co. originally requested and confirms receipt of photo evidence that roofing repairs and shed replacement were completed. However, the Ins. Co. is now refusing to release the supplemental payment for RCV pending receipt of "a final invoice for all repairs". This includes individual invoices for repair/replacement of items both related and unrelated to RCV holdback, ie. items for which they provided ACV repair/replacement cost estimates and already paid. In essence, they claim the right to keep the RCV amount related to roof repair and shed replacement if invoices are not provided for repair/replacement of unrelated items that did not incur RCV holdback on their estimates.
When asked to identify exactly which policy provision was being used to justify withholding RCV in this instance, the Property Adjuster failed to answer definitively. He simply responded "Regarding the request for receipt of all costs in order to release the RCV payment: It is everyday practice that we request documentation for incurred costs on a claim to release the RCV payment, your agent should be able to confirm that this is in fact a policy provision." His supervisor pointed to a general provision simply saying the Ins. Co. has a right to ask for documentation of repairs. The agent is clueless as to internal claim procedure specifics.
Everything in my policy says they are legally obligated to pay ACV and will further pay RCV holdback upon separate claim and receipt of requested documentation. Again, RCV is a line item associated with a particular repair and Insureds are required to notify Ins. Co. separately of a claim for RCV (done). All of which can reasonably be interpreted as requiring repair/replacement documentation for the line item that actually incurred the RCV holdback. I can find nothing to the contrary or specifically stating that claim and recovery of RCV holdback for a specific item can be conditioned on anything else. I'm wondering if this is somehow a CYA move by the Property Adjuster who may have failed to properly document before paying ACV.
In any event, IMHO, this request at this time seems both unnecessary and unreasonable. A call to NC DOI inquiry line suggests that conditioning payment of RCV on anything other than evidence that the RCV repair in question was completed does seem inappropriate and perhaps even unenforceable. Of course, they are quick to add they can't provide legal advice, and encourage a formal DOI complaint to elicit a formal response from the Ins. Co. corporate office. A formal DOI complaint would put my claim at the Ins. Co. on hold for who knows how long (it has already been over 8 months since date of loss).
I'd prefer to put a few questions to the community here first:
Q.1) Can a Ins. Co. offering enhanced replacement cost homeowners insurance in NC that settles on an ACV basis legally refuse to pay RCV holdback for a specific repair, after confirming receipt of requested documentation to evidence repair or replacement of the item directly related to the RCV? For example, can the return of RCV originally attributed to the shed replacement legally be conditioned on producing an invoice for replacement of a dwelling light fixture for which no RCV applies and ACV has already been paid?
Q.2) If yes, what if that light fixture was replaced by the D.I.Y. homeowner with a fixture for less than the ACV amount estimated by the Ins. Co. and already paid to the Insured? Can the Ins. Co. legally 'claw back' any difference from ACV paid, or use this as legal justification to reduce RCV on an unrelated item by a like amount, to pay a lesser net RCV amount?
Q.3) If yes, what legal obligation does an Insured who owns their home free and clear actually have to repair or replace any damaged item after receipt of the ACV settlement payment? The same Ins. Co. simply inspected, estimated damage repair cost on my vehicle and cut a check for ACV saying you own it outright, so you can either fix it or drive it with the dents. Your choice, we don't care. Similarly speaking, absent any outstanding RCV amount or requirement by lienholders, what does any Ins. Co. even care what happens after they cut a ACV check for home damages?
Thanks for your input.
Hey all, I have been trying to close a HO7 Enhanced Coverage Homeowner Policy claim in NC for damage caused by neighbors trees. The auto and personal property claims have settled. The actual cash value (ACV) for all damage repairs related to the dwelling and outbuilding (shed) claims has been paid by the Ins. Co. The final payment has come down to a question related to recoverable depreciation (RCV) holdback. There was RCV included on two items in the dwelling repair estimates related to roofing material and repair/replacement of the shed. The RCV and holdback amounts are noted as separate line items on the estimates.
The Ins. Co. originally requested and confirms receipt of photo evidence that roofing repairs and shed replacement were completed. However, the Ins. Co. is now refusing to release the supplemental payment for RCV pending receipt of "a final invoice for all repairs". This includes individual invoices for repair/replacement of items both related and unrelated to RCV holdback, ie. items for which they provided ACV repair/replacement cost estimates and already paid. In essence, they claim the right to keep the RCV amount related to roof repair and shed replacement if invoices are not provided for repair/replacement of unrelated items that did not incur RCV holdback on their estimates.
When asked to identify exactly which policy provision was being used to justify withholding RCV in this instance, the Property Adjuster failed to answer definitively. He simply responded "Regarding the request for receipt of all costs in order to release the RCV payment: It is everyday practice that we request documentation for incurred costs on a claim to release the RCV payment, your agent should be able to confirm that this is in fact a policy provision." His supervisor pointed to a general provision simply saying the Ins. Co. has a right to ask for documentation of repairs. The agent is clueless as to internal claim procedure specifics.
Everything in my policy says they are legally obligated to pay ACV and will further pay RCV holdback upon separate claim and receipt of requested documentation. Again, RCV is a line item associated with a particular repair and Insureds are required to notify Ins. Co. separately of a claim for RCV (done). All of which can reasonably be interpreted as requiring repair/replacement documentation for the line item that actually incurred the RCV holdback. I can find nothing to the contrary or specifically stating that claim and recovery of RCV holdback for a specific item can be conditioned on anything else. I'm wondering if this is somehow a CYA move by the Property Adjuster who may have failed to properly document before paying ACV.
In any event, IMHO, this request at this time seems both unnecessary and unreasonable. A call to NC DOI inquiry line suggests that conditioning payment of RCV on anything other than evidence that the RCV repair in question was completed does seem inappropriate and perhaps even unenforceable. Of course, they are quick to add they can't provide legal advice, and encourage a formal DOI complaint to elicit a formal response from the Ins. Co. corporate office. A formal DOI complaint would put my claim at the Ins. Co. on hold for who knows how long (it has already been over 8 months since date of loss).
I'd prefer to put a few questions to the community here first:
Q.1) Can a Ins. Co. offering enhanced replacement cost homeowners insurance in NC that settles on an ACV basis legally refuse to pay RCV holdback for a specific repair, after confirming receipt of requested documentation to evidence repair or replacement of the item directly related to the RCV? For example, can the return of RCV originally attributed to the shed replacement legally be conditioned on producing an invoice for replacement of a dwelling light fixture for which no RCV applies and ACV has already been paid?
Q.2) If yes, what if that light fixture was replaced by the D.I.Y. homeowner with a fixture for less than the ACV amount estimated by the Ins. Co. and already paid to the Insured? Can the Ins. Co. legally 'claw back' any difference from ACV paid, or use this as legal justification to reduce RCV on an unrelated item by a like amount, to pay a lesser net RCV amount?
Q.3) If yes, what legal obligation does an Insured who owns their home free and clear actually have to repair or replace any damaged item after receipt of the ACV settlement payment? The same Ins. Co. simply inspected, estimated damage repair cost on my vehicle and cut a check for ACV saying you own it outright, so you can either fix it or drive it with the dents. Your choice, we don't care. Similarly speaking, absent any outstanding RCV amount or requirement by lienholders, what does any Ins. Co. even care what happens after they cut a ACV check for home damages?
Thanks for your input.
