E-Edition
Adjusters International Dis aster Recovery Consulting
EDI T OR’S NO T E
Central to the adjustment of a property insurance loss is the rule by which the loss is valued. In the insurance field, few rules have been subjected to as many definitions, redefinitions and interpretations as this one. In this special e-edition of Adjusting Today, expert Jerome Trupin discusses the two fundamental approaches to loss valuation: the Actual Cash Value Depreciation Deduction and the Broad Evidence Rule. His analysis, examples and professional perspective combine for informative and insightful reading. We thank him for sharing his expertise and opinion and are confident you will find them helpful. Sheila E. Salvatore, Editor
Actual Cash Value Depreciation Deduction and the Broad Evidence Rule
by Jerome Trupin, CPCU, CLU, ChFC
Does actual cash value (ACV) always equal replacement cost less depreciation? Don’t be too sure. A recent New York court case held that the insurer could not deduct depreciation when calculating the actual cash value of a partial loss.1 The valuation provision in the policy read as follows: 9. Valuation We will determine the value of Covered Property in the event of
loss or damage as follows: a. At actual cash value as of the time of loss or damage… (There were some exceptions that followed, but they didn’t apply to this loss.) The court said that, unlike older New York policies, the policy did not specify that actual cash value is to be ascertained with proper