Insurance 101 – Chapter 8 – Volume 81 – Cheeks and ACV

Cheeks and ACV

Since Cheeks, the Insurance Services Office has placed definitions of
actual cash value in the homeowners policy to define it as  replacement cost less physical depreciation.” Plaintiffs’ lawyers will argue that since the standard fire policy does not define the term the insurer cannot reduce the coverage by putting in a definition  different than that imposed by the courts. Interestingly, when Mr. Cheeks’ claim was appraised a second time using the fair market value definition rather than replacement cost less depreciation, the award was approximately 50% less than the original award.

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library

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The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

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