| Author |
Message |
Clayton Carr
Member
Username: Clayton
Post Number: 79
Registered: 11-2001
| | Posted on Wednesday, July 31, 2002 - 11:38 am: | |
I was doing a case law search for some background work on Jim's efforts on depreciation and I came across a case that may have had some relevance to the title and creation of this thread.
"Community Assisting Recovery, Inc vs Assessment of Loss" CA Court of Appeal, 2nd Dst (Oct 4/01).
This case involves a claim for unfair business practices in the manner used to assess a property loss. The plantiff, a non-profit corp filed an action against 194 insurers. It alleged that in the absence of policy language otherwise, actual cash value is the proper measure of damages for property loss, not replacement cost less depreciation. Actual cash value is defined as fair market value, in the absence of any other definition. The plantiff sought relief and recalculation of prior claims on the basis of fair market value rather than RC less depreciation.
The court ruled that the practice of carriers to use RC less depreciation was not an unfair business practice.
Perhaps, in the indusrty a/o media "run up" to the court house steps, the adverse suggestion that depreciation was or was to become an unacceptable principal, got overstated in the hype.
The full case can be read at the following link
www.law.com/regionals/ca/opinions/oct/b128480.shtml
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Andrew K. Sloane
Member
Username: Claimsranger
Post Number: 22
Registered: 12-2001
| | Posted on Saturday, May 18, 2002 - 12:20 am: | |
So what's the question, according to my team Mngr, (from CA.) ALL PAYMENTS FROM OUR CARRIER ARE PAID UP FRONT RC WITH NO DEPREC.! That coincides with the 2 weeks I spent in their school in "NORMAL" IL. TEXAS is next up to $7500- cov A & $1500 UPP. Aint it a wonderful, just wunderful way to close a claim? Go Figure! |
Dale Strain
Registered User
Username: Catmandale
Post Number: 14
Registered: 1-2002
| | Posted on Friday, May 17, 2002 - 4:17 pm: | |
Ghost:
THE FIRST GREY HAIR.
NO, let it stay. It speaks but truth:
My Autumn's day is dawning.
The dream is past; sweet dream of youth.
Hair, I accept thy warning.
With mournful thought, my spirit swells,
At the wild chime of memory bells.
(from the First Grey Hair by Mary E. Tucker)
Just remember...grey hair is better than none...and no hair is better than a dirt blanket.
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Ghostbuster
Registered User
Username: Ghostbuster
Post Number: 275
Registered: 12-2000
| | Posted on Friday, May 17, 2002 - 1:56 pm: | |
And...to wax philosophically for a moment, this all brings to mind a verse from the Gray Hair Lament.
"I want to live in the place and time I grew up in,
...Where is it?" |
Dale Strain
Registered User
Username: Catmandale
Post Number: 13
Registered: 1-2002
| | Posted on Friday, May 17, 2002 - 1:03 pm: | |
Ahh, Fair Market Value. Jefferson v Alameda County.
The insurance loss is the difference in Fair Market Value before and after the loss. A real estate valuation.
Methodology - determine the sales price of the property, deduct the land value and there you are.
What if there is no bare land available to use as a comp for the land value? Tax rolls? Sure, I'm going to bet they're accurate.
Well, you can take the sales price and deduct the value of the improvements. How do you determine the value of the improvements? The cost to replace less depreciation. OOPS.
There you go 'round in circles...
(Message edited by Catmandale on May 17, 2002) |
John A. Postava
Registered User
Username: Johnp
Post Number: 29
Registered: 12-2000
| | Posted on Friday, May 17, 2002 - 11:00 am: | |
One of SIMSOL's larger independent firms in California asked us to remove the term DEPRECIATION from California estimates over a year ago. CA users have a checkbox on our system's Global Print screen which reads "Substitute FMV for ACV". When activated, the estimate printout columns print "RCV", "Adjustment", "FMV" (Fair Market Value) rather than RCV, DEP and ACV. Our client indicated that there was pending legislation to do away with "depreciation" in insurance contracts in CA and that the terminology change was the first step.
I will contact them next week, after I return from the NFIP WYO conference and see what where that legislation is at the present time. |
Dale Strain
Registered User
Username: Catmandale
Post Number: 12
Registered: 1-2002
| | Posted on Friday, May 17, 2002 - 10:21 am: | |
Perhaps we could call it a "temporary correction in the normally upward-trending value of your home"?
How about a prior usage and diminished profit premium?
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mark salmon
Registered User
Username: Olderthendirt
Post Number: 182
Registered: 12-2000
| | Posted on Friday, May 17, 2002 - 9:40 am: | |
Perhaps the word is to close to denial. Maybe we need politicaly correct expressions. any ideas?
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D Wong Whey
Registered User
Username: Dwongwhey
Post Number: 134
Registered: 10-2001
| | Posted on Friday, May 17, 2002 - 8:11 am: | |
I see that Uncle Ghost had his special breakfast diet of fruit, nuts and flakes this morning along with his New York Times. Quite tasty heh? |
Ghostbuster
Registered User
Username: Ghostbuster
Post Number: 274
Registered: 12-2000
| | Posted on Friday, May 17, 2002 - 7:28 am: | |
Well, if one carefully and with great left coast sensetivity analyses the "D" situation, it is one of the most nastiest and politically incorrect words in the English language. The other two being 'Deductible' and Tarheel 'Democrat'. (Just now I feel like a graffitti artist for writing these two bad words.)
We must ever be oh so appreciative of the delicate nature of these obviously superior California denizens and their evolving social mores. If this means flushing our time honored technical jargon, we should feel honored to do so.
After all,...they are our 'betters', aren't they? |
Eric Carlson
Registered User
Username: Ecarlson
Post Number: 6
Registered: 6-2000
| | Posted on Thursday, May 16, 2002 - 11:47 pm: | |
Scott, we've heard that same thing from clients out in California so maybe you're not such a rumormonger after all. Apparently something to that effect had been circulating out there. Then again, maybe we're talking to the same misinformed person! Trying to steal our business, eh?  |
Scott Wiens
Registered User
Username: Digitalsaw
Post Number: 25
Registered: 12-2000
| | Posted on Thursday, May 16, 2002 - 11:20 am: | |
Cado Gang,
I just wanted to make sure you all know my post was not intended to spread false facts or to start a rumor. I was just asking you guys, the experts, for clarification and I obviously got the clarification I was looking for. Now, I can help my client clear up a misunderstanding or a rumor he heard  . Thanks to all for responding. |
Scott Wiens
Registered User
Username: Digitalsaw
Post Number: 24
Registered: 12-2000
| | Posted on Thursday, May 16, 2002 - 10:54 am: | |
Guys,
Thanks for the responses. I appreciate the information. I will get back with my client on what you have stated.
Scott |
Dale Strain
Registered User
Username: Catmandale
Post Number: 11
Registered: 1-2002
| | Posted on Thursday, May 16, 2002 - 12:02 am: | |
Is it possible they were thinking of the term "holdback"? This term has been used quite a bit in the past, but is not quite specific enough for today's environment. |
Roy Cupps
Registered User
Username: Roy
Post Number: 25
Registered: 2-2001
| | Posted on Wednesday, May 15, 2002 - 11:38 pm: | |
I agree "depreciation" is still included in the adjustment of claims in CA. I'm currently on assignment in California and we still use the "depreciation" word in our estimates and reports. |
Jim Flynt
Registered User
Username: Jimflynt
Post Number: 305
Registered: 6-2001
| | Posted on Wednesday, May 15, 2002 - 5:49 pm: | |
Scott:
I just talked by telephone (213-897-8921) with one of the California Department of Insurance Senior Hearing Officers (Isabel - Consumer Officer # 047) in Los Angeles, who advises me that she is unaware of any rule, act, law, fiat, or regulation from the California DOI or any other state agency which would prohibit the use of the word depreciation in, on or upon an estimate of repairs or damages within the State of California. According to Isabel, RCV and ACV policies for homeowners are alive and well in California.
I would consider your rumor to be baseless and without any merit.
You might suggest to your source that next time they do a little research before speading this kind of junk around. Since it only took me about 10 minutes to get the facts, the same would be true for them as well.
(Message edited by jimflynt on May 15, 2002) |
Jim Flynt
Registered User
Username: Jimflynt
Post Number: 304
Registered: 6-2001
| | Posted on Wednesday, May 15, 2002 - 5:12 pm: | |
Scott: Here is a reprint of information contained on the California Department of Insurance website (hyperlink enclosed).
I have also taken the liberty of sending an email inquiry to the California DOI with your question and will respond/post here upon any response.
Obviously from reading what is posted on the California DOI website, RCV and ACV policies both still exist and are legal in California.
http://www.insurance.ca.gov/docs/FS-Looking.htm
*************************************************
Will My Policy Completely and Totally Replace My Home If it Is Destroyed?
This depends on two important factors: is my policy a replacement cost value policy or an actual cash value policy. If your policy is a cash value policy, it may not. A policy which pays you the Actual Cash Value pays you an amount equivalent to the fair market value of the damaged property immediately before the loss occurred.
If you have a replacement cost policy, the chances that you will be able to completely rebuild your home are better, but there are many types of replacement cost policies, so your need to be careful. A policy cannot be sold as a guaranteed replacement cost policy unless it will pay to completely rebuild the home. Other types of replacement cost policies will pay your policy limits, plus a certain percentage above those limits. Some policies do not have a coverage called "Building Code Upgrade Coverage". Cities and Counties periodically change their building codes. Unless your policy has this coverage, your insurance company may not pay for changes you may need to make to the structure of your home to bring it up to current building codes.
Read your policy carefully and understand what coverage it provides. If you are not clear, contact your agent or company. You can call our Consumer Hotline for further clarification and confirmation.
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mark salmon
Registered User
Username: Olderthendirt
Post Number: 181
Registered: 12-2000
| | Posted on Wednesday, May 15, 2002 - 4:46 pm: | |
Not true. May be a company thing, but it all over my estimates and forms. |
Scott Wiens
Registered User
Username: Digitalsaw
Post Number: 23
Registered: 12-2000
| | Posted on Wednesday, May 15, 2002 - 2:58 pm: | |
Alright gang. Help me out here. I was told recently by a client that the term 'Depreciation' was not allowed to appear on any property estimate documentation in the state of California. I had heard this somewhere else but can't remember the source. Can any of you guys shed some light on this one for me? I am looking into it on the web but have not had any luck looking initally. Help me out if you know anything about this.
Thanks in advance. |
