Q. We have an insured who had hail damage to their roof almost a year ago and didn’t realize it until they had a roof inspection. Their policy has replacement cost but the company is only paying ACV because of the late reporting of the claim. Can they do this?
A. Yes, they can. IIAT addresses this issue in the Roof Claims Issues in Texas publication:
“A recent and developing issue – at least with one company – is whether a claim reported long after the damage actually occurred should be paid on an actual cash value basis with no option to receive the difference between ACV and RC after the damaged property is repaired or replaced.
The Texas homeowners Form B requires replacement of the damaged property within 365 days after the loss unless the insured requests additional time in writing. The ISO forms require the insured to notify the insurer within 180 days after the loss that recovery on a replacement cost basis is intended.
If the loss occurred more than 365 days (Texas) or 180 days (ISO) prior to the first notice of loss, is the insurance company obligated to pay on a replacement cost basis? At least one company says “no.” TDI officials told IIAT they believe the company’s interpretation is correct.”