Why was depreciation withheld from a claim when the dwelling policy stated there was replacement cost coverage?
Policyholders have replacement cost coverage for a dwelling if they carry 80% of the amount of its replacement cost (i.e. $100,000 r.c. value X 80% = $80,000). On page six of the Dwelling Policy, it states that we will pay only the actual cash value claim (or the depreciated claim amount) until the repairs or replacement is made and all policy conditions are in compliance. In other words, we deduct the depreciation from your replacement cost claim and hold that money in reserve until you document the work has been done and the money allowed has been spent.
