Insurance Law

"Actual Cash Value" Means Fair Market Value. Where, as here, a loss settlement provision in an insurance policy states that covered losses are to be compensated based upon "actual cash value at the time of loss" but in an amount not more than the amount required to repair or replace the damaged property, "actual cash value" means fair market value, not replacement cost less depreciation. In this case, the plaintiff owned property that suffered earthquake damage. A proof of loss was submitted to the insurer based upon damage to the homeís roof, walls, tiles, and concrete, among other things. The insurer determined that "actual cash value" meant the cost of repairing or replacing the damaged property less depreciation. On appeal, the court reversed a judgment in favor of the insurer, holding that the correct definition of "actual cash value" was fair market value, not the formula used by the insurer. (Orenzo Cheeks v. California Fair Plan Assín (1998) 61 Cal.App.4th 423.)


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