When a gentleman's home suffered storm damage, he fell into a significant dispute over his coverage. The policy was issued on an actual cash value basis, so there was agreement that the portion of payment for the materials used for repairs should be reduced. The problem arose over the other portion of the loss, labor costs.

The homeowner discovered that the insurer had a novel approach to depreciation that was being used with him and many other policyholders. The settlement also included a reduction for the amount paid for labor. The homeowner became the lead plaintiff in a class action lawsuit to challenge that practice. The dispute was appealed by the insurer when a lower court ruled that the homeowner's interpretation was proper.

Click here to see how a higher court viewed the insurance company's argument regarding the application of depreciation in ACV losses.

Residential property coverage has always been a challenge when it ages. Dwellings continue to be valuable because of their ongoing function in providing shelter. However, as time passes, valuation becomes a larger concern due to a disparity that develops and widens should a significant loss occur to the insured property.

Residential property policies are designed to align an insurer's obligation to protect property owners in accordance with the value of the property that is insured. When losses happen, settlement is made in a manner that walks a fine line between function and value.

Click here for an excerpt of wording on settlement found in the ISO Dwelling Property 3 Coverage Analysis in the PF&M portion of Advantage Plus.

So much of our current effort in both our personal and professional lives are tied-up with the pandemic. We all know just how thoroughly married the insurance sector is to this crisis which, unfortunately, has morphed into a long-range, substantial issue. In client and court spaces, questions are being raised, discussed and, too often, litigated with regard to the coverage provided by myriad forms of insurance.

The loss settlement process is a foundational piece of coverage intent. As insurance professionals in the 21st Century, one of our most important jobs is still to embed an understanding of insurance's proper role to indemnify against eligible losses. Older residences are a prime example of having to manage insured expectations regarding reimbursement after eligible losses. The passage of time, even with the most careful maintenance, still creates conditions that reduce property value and makes insurance a source of compensation that is adjusted for the reality that replacement cost settlement is not an option.

Click here for to see an article discussing various considerations for older homeowners, particularly with items that affect insurability and value under E-marketing for Agencies found in Advantage Plus.

Personal Lines clients don't usually have the same level of insurance savvy as do Commercial clients. Often, additional effort is needed to assist them with making sure that their loss risks have been properly addressed. Spending time to educate clients is a marvelous opportunity to explore their personal risk environs.

Agents who wish every advantage to maintain and, better still, experience healthy growth understand that current clients can't be ignored. In fact, it is critical that they are handled in a manner that demonstrates that their business and coverage needs are valued and monitored. It's important to use tools that allow insurance professionals to competently build a client knowledge base. Actively seeking information is the proactive stance needed to properly serve insureds.

Click here to see a letter containing a homeowners checklist that can be invaluable in determining a client's current exposures that should be addressed. It's from Building Business Letters found in Advantage Plus.