{"id":900173,"date":"2022-07-26T14:34:54","date_gmt":"2022-07-26T20:34:54","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=900173"},"modified":"2022-07-26T14:34:59","modified_gmt":"2022-07-26T20:34:59","slug":"depreciation-missouri-takes-stand","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/depreciation-missouri-takes-stand\/","title":{"rendered":"Missouri Takes A Stand On Depreciation"},"content":{"rendered":"\n<p>Alycen A. Moss and Dakota Knehans | <a href=\"https:\/\/www.propertyinsurancelawobserver.com\/2022\/07\/21\/missouri-takes-a-stand-on-depreciation\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Property Insurance Law Observer<\/a><\/p>\n\n\n\n<p>On June 28, the Missouri Court of Appeals upheld a lower court\u2019s decision finding Lexington Insurance Company (\u201cLexington\u201d) breached its policy with homeowner Cynthia Franklin. Franklin\u2019s home has sustained damage in a May 2016 storm for which she submitted a claim with Lexington. Lexington utilizes a two-step adjusting process in which it first determines the ACV of a covered loss and issues an ACV payment. Then, if an insured requests additional reimbursement for repair and replacement costs over the amount previously paid, Lexington assesses the appropriateness of payment. In processing Franklin\u2019s claim, Lexington withheld over $5,000 in actual cash value, citing to \u201c<a href=\"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/\" target=\"_blank\" rel=\"noreferrer noopener\">depreciated labor costs<\/a>.\u201d Lexington, in a letter dated July 7, 2016, explained that Franklin could recover \u201capplicable depreciation for dwelling\/building items\u201d if she submitted paid repair invoices. After completing additional repairs, Franklin failed to forward any invoices or receipts. The claim was then closed by Lexington in October of 2017.<\/p>\n\n\n\n<p>In February 2018, Franklin sued, arguing that the policy itself was silent as to whether labor depreciation was included in the actual cash value of a claim, and as such she was entitled to recover the withheld amount. In his deposition, the desk adjuster for Franklin\u2019s claim testified that he was unaware that the field adjuster had subtracted depreciated labor costs before suit had been filed, and if he had known, he would have requested correction from the adjuster and issued a higher ACV.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/www.propertyinsurancelawobserver.com\/wp-content\/uploads\/sites\/11\/2022\/07\/dakota-blog-1.jpg\"><img decoding=\"async\" src=\"https:\/\/www.propertyinsurancelawobserver.com\/wp-content\/uploads\/sites\/11\/2022\/07\/dakota-blog-1.jpg\" alt=\"\" class=\"wp-image-2150\"\/><\/a><\/figure>\n\n\n\n<p>Bearing in mind this testimony, and citing to law around the country regarding policy ambiguity, the lower court and the Missouri Court of Appeals held that Lexington\u2019s two step adjustment process meant Franklin was not required to elect between ACV and replacement costs. Further, in determining whether labor depreciation was included within the definition of depreciation allowed to be subtracted from the base ACV, the Court of Appeals agreed with the lower court that the policy\u2019s failure to explicitly include labor depreciation within its definition of \u201cdepreciation\u201d meant the insurer could not include it. Considering the policy\u2019s silence and Lexington\u2019s typical practices, the Court held Franklin was entitled to recover the withheld amount.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\" target=\"_blank\" rel=\"noreferrer noopener\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Alycen A. Moss and Dakota Knehans | Property Insurance Law Observer On June 28, the Missouri Court of Appeals upheld a lower court\u2019s decision finding Lexington Insurance Company (\u201cLexington\u201d) breached its policy with homeowner Cynthia Franklin. Franklin\u2019s home has sustained damage in a May 2016 storm for which she submitted a claim with Lexington. Lexington&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/depreciation-missouri-takes-stand\/\">Continue reading <span class=\"screen-reader-text\">Missouri Takes A Stand On Depreciation<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[11015,10721],"tags":[6601,9895,6600,10904],"class_list":["post-900173","post","type-post","status-publish","format-standard","hentry","category-construction-claims","category-insurance","tag-actual-cash-value","tag-advise-consult","tag-depreciation","tag-insurance-coverage-claims","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Missouri Takes A Stand On Depreciation - Advise &amp; 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