OHIO: Roof Depreciation and Replacement vs Partial Replacement (Adjusters Wanted)

[MIGA1626]

Hello! I had a client get a normal roof wind claim in Ohio. The adjuster depreciated it for the age of the roof and only allowed for partial replacement rather than full. The client is under the impression that Ohio is a matching state/full replacement state? Is any of this true? I am a good agent but a terrible adjuster/contractor. Thanks!

 

[Al3x Lee]

Depends on the circumstances. Is it an RC or ACV policy?

[EXTERNAL LINK] - A Reasonable Match Is Often, But Not Always, Acceptable Under Ohio Law - Isaac Wiles

In Wright v. State Farm Fire and Cas. Co., the U.S. Sixth Circuit Court of Appeals held that a homeowner’s insurer who covered only repairs for the insured’s roof was not required to cover replacement of the entire roof under the OAC. If the insurer was able to replace as much of the item as to result in a reasonably comparableappearance with parts of like kind and quality, this was permissible under the policy and the OAC.

A similar result was also reached in Zinser v. Auto-Owners Ins. Co., in which the homeowner sustained a wind loss on his property and sought to have the entire siding replaced to meet the reasonably comparableappearance requirement. Citing Wright, the 12th Appellate District of Ohio held that a homeowner’s insurer that covered only repairs for the insured’s siding was not required to cover replacement of the entire building under the OAC.

[EXTERNAL LINK] - Rule 3901-1-54 - Ohio Administrative Code | Ohio Laws

(I) Standards for prompt, fair and equitable settlement of claims under fire and extended coverage insurance policies

(1) If a fire and extended coverage insurance policy provides for the adjustment and settlement of first party losses based on replacement cost, the following shall apply:

(a) When a loss requires replacement of an item or part, any consequential physical damages incurred in making such repair or replacement not otherwise excluded by the policy, shall be included in the loss.

(b) When an interior or exterior loss requires replacement of an item and the replaced item does not match the quality, color or size of the item suffering the loss, the insurer shall replace as much of the item as to result in a reasonably comparable appearance.

(c) When an insurer settles a loss that results in the insured paying a portion of the repair or replacement as betterment, the insurer shall maintain documentation of the basis for computing the betterment charge, and the insured's agreement to such charge prior to incurring the expense of the repair or replacement.


(2) If a fire and extended coverage insurance policy provides for the adjustment and settlement of losses on an actual cash value basis, the following shall apply:

(a) The insurer shall determine actual cash value by determining the replacement cost of property at the time of loss, including sales tax, less any depreciation. Upon the insured's request, the insurer shall provide documentation detailing all depreciation deductions.

(b) If the insured's interest is limited because his property has nominal or no economic value, or a value disproportionate to replacement cost less depreciation, the insurer is not required to comply with paragraph (I)(2)(a) of this rule regarding the determination of actual cash value. However, the insurer shall provide upon the insured's request, a written explanation of the basis for limiting the amount of recovery along with the amount payable under the policy.

 

[Markthebroker]

Depends on the circumstances. Is it an RC or ACV policy?

[EXTERNAL LINK] - A Reasonable Match Is Often, But Not Always, Acceptable Under Ohio Law - Isaac Wiles

In Wright v. State Farm Fire and Cas. Co., the U.S. Sixth Circuit Court of Appeals held that a homeowner’s insurer who covered only repairs for the insured’s roof was not required to cover replacement of the entire roof under the OAC. If the insurer was able to replace as much of the item as to result in a reasonably comparableappearance with parts of like kind and quality, this was permissible under the policy and the OAC.

A similar result was also reached in Zinser v. Auto-Owners Ins. Co., in which the homeowner sustained a wind loss on his property and sought to have the entire siding replaced to meet the reasonably comparableappearance requirement. Citing Wright, the 12th Appellate District of Ohio held that a homeowner’s insurer that covered only repairs for the insured’s siding was not required to cover replacement of the entire building under the OAC.

[EXTERNAL LINK] - Rule 3901-1-54 - Ohio Administrative Code | Ohio Laws

(I) Standards for prompt, fair and equitable settlement of claims under fire and extended coverage insurance policies

(1) If a fire and extended coverage insurance policy provides for the adjustment and settlement of first party losses based on replacement cost, the following shall apply:

(a) When a loss requires replacement of an item or part, any consequential physical damages incurred in making such repair or replacement not otherwise excluded by the policy, shall be included in the loss.

(b) When an interior or exterior loss requires replacement of an item and the replaced item does not match the quality, color or size of the item suffering the loss, the insurer shall replace as much of the item as to result in a reasonably comparable appearance.

(c) When an insurer settles a loss that results in the insured paying a portion of the repair or replacement as betterment, the insurer shall maintain documentation of the basis for computing the betterment charge, and the insured's agreement to such charge prior to incurring the expense of the repair or replacement.


(2) If a fire and extended coverage insurance policy provides for the adjustment and settlement of losses on an actual cash value basis, the following shall apply:

(a) The insurer shall determine actual cash value by determining the replacement cost of property at the time of loss, including sales tax, less any depreciation. Upon the insured's request, the insurer shall provide documentation detailing all depreciation deductions.

(b) If the insured's interest is limited because his property has nominal or no economic value, or a value disproportionate to replacement cost less depreciation, the insurer is not required to comply with paragraph (I)(2)(a) of this rule regarding the determination of actual cash value. However, the insurer shall provide upon the insured's request, a written explanation of the basis for limiting the amount of recovery along with the amount payable under the policy.

Al3x Lee for insurance commissioner!

 

[adjusterjack]

The client is under the impression

"Under the impression" is equal to "I may have heard it some place but I really don't know."

The adjuster depreciated it for the age of the roof and only allowed for partial replacement rather than full.

Now that the "law" has been presented I would like to see photos of the roof damage before rendering my professional retired property claims adjuster opinion as to whether the law has been followed.

And also whether the policy is RC or ACV would help.

And the age of the roof would also help.

 

[MIGA1626]

DAMN! I am not smart enough to read all of that. YOU ARE FORGETTING IM DUMB MY IQ IS LIKE A 8!!! Thank you though....

 

[Al3x Lee]

DAMN! I am not smart enough to read all of that. YOU ARE FORGETTING IM DUMB MY IQ IS LIKE A 8!!! Thank you though....

Are you too dumb to respond if it's ACV or RC?

 

[adjusterjack]

DAMN! I am not smart enough to read all of that. YOU ARE FORGETTING IM DUMB MY IQ IS LIKE A 8!!! .

Did you tell that to your client?

 

[Allen Trent]

Are you too dumb to respond if it's ACV or RC?

RC? Remote Control?

 

[adjusterjack]

RC? Remote Control?

No.

It's a soft drink.

RC Cola.

 

[Allen Trent]

No.

It's a soft drink.

RC Cola.

Ray Charles Cola?