Migliaccio & Rathod LLP is investigating whether certain Missouri property insurance companies have improperly reduced actual cash value payments by depreciating labor and other nonphysical repair costs.
When calculating actual cash value for damaged property, insurers may estimate the cost of repairs and subtract depreciation to account for age and wear. However, labor, contractor overhead, and other nonphysical expenses do not deteriorate in the same manner as building materials. Whether these costs may be depreciated depends on the policy language and applicable state law.
Migliaccio & Rathod is investigating whether Missouri insurers have applied depreciation to labor or other nonphysical repair expenses without sufficient contractual authorization, potentially reducing payments owed to policyholders after covered property losses.
Policyholders May Have Experienced:
- Having labor costs depreciated when calculating actual cash value;
- Receiving claim estimates showing depreciation applied to contractor labor or overhead;
- Having repair payments reduced by depreciation of nonphysical expenses;
- Receiving less than the amount required under their policy’s actual cash value provisions;
- Being unable to determine which repair costs were depreciated; or
- Paying additional repair expenses because of potentially improper depreciation deductions.
Potential Claims May Include:
- Improper depreciation of labor or nonphysical repair costs;
- Incorrect calculation of actual cash value benefits;
- Breach of insurance contract;
- Improper underpayment of covered property damage claims; or
- Violations of applicable Missouri insurance laws.
Signs You May Be Affected:
- You had a property insurance policy in Missouri;
- You filed a covered claim for damage to a home or other insured property;
- Your insurer calculated payment using actual cash value;
- Your claim estimate included depreciation of labor, overhead, or other nonphysical costs;
- Your policy did not clearly authorize the disputed depreciation; or
- You have the insurance policy and itemized repair estimate showing the deductions.
If you believe you experienced this issue, we would like to hear from you. Please complete the contact form on this page, send us an email at [email protected], or give us a call.