Immediate Action Needed

A replacement cost policy provides the funds to replace/repair/rebuild your damaged property after a loss. For example, your 30 year roof is 12 years old and was damaged by a storm. It will cost $10,000 to replace a damaged roof. The insurance may pay $6,000 ACV up front and the other $4,000 after the repair has been made.

An actual cost policy provides funds for the damaged property at today's value. For example, your 30 year roof is 12 years old and was damaged by a storm. The insurance company will show the damages as 10,000 and depreciation of $4,000. Your insurance will pay $6,000.00 actual cash value.

Insurance companies are required to give you at least 180 days to decide if you want to perform repairs and receive the recoverable depreciation. Most companies write it in their policy as exactly 180 days. 

Usually, your policy will state something like "provided you notify us, within 180 days after the date of loss, of your intent to repair or replace the damaged building".

You need to send an email to your insurance company or insurance adjuster stating something similar to:

I am in the process of repairing the property and I intend to claim my recoverable depreciation. I am working with a contractor to perform the repairs.

You can read through your policy to determine which kind of policy that you have. Here is an easy shortcut.

If you read through the insurance provided estimate of damages, there is a column called Depreciation.

Scan the interior rooms and look at the depreciation. If all of the depreciation is in angle brackets " <100.00>", you have the actual cash value policy and you can stop here. No further action is required for your policy. If most of the depreciation is listed in parenthesis "(100.00)", you have an replacement cost value policy and you must inform the insurance company of your intent to repair the property and recover the depreciation.

The Louisiana Department of Insurance has (with each hurricane) strongly urged the insurance carriers to extend this deadline and work with the citizens of Louisiana, but he hasn't made it set in stone, at least not yet. Most insurance companies will follow the lead of the Insurance Commissioner. Our suggestion is to not give the insurance company any wiggle room to change your coverage to ACV. Write your email today so that it is in writing.

Send an email to your insurance adjuster today and also copy the main insurance email address if one has been provided to you. For instance State Farm has a generic address of statefarmfireclaims@statefarm.com and Allstate has  claims@claims.allstate.com . make sure to CC the addresses in addition to emailing your inside adjuster. The subject line should have ONLY the CLAIM number/code.

If you want to read or reference the bulletin put out by Louisiana Commissioner of Insurance James Donelon, Click Here