You snooze, you lose
On April 25, 2015, hail from a thunderstorm caused roof damage to two houses that were owned by Ricky and Danielle Bosse. On January 11, 2017, the Bosses submitted a claim to their insurer, Access Home Insurance Company, for the roof damage to the house located at 1307 Girod Street. Access sent an adjuster to inspect the damage. After concluding that the roof and other portions of the house had been damaged in the 2015 storm, the adjuster determined that the replacement cost value for the damage was $5,677.03. The adjuster valued the depreciation of the damaged areas at $2,277.28 and, subtracting the amount of depreciation from the replacement cost value, determined that the actual cash value for the house was $3,399.75. After subtracting the policy’s $1,000 deductible, Access sent a check to the Bosses in the amount of $2,399.75 as payment for the claim.
Also on January 11, 2017, the Bosses submitted a claim to Maison Insurance Company for roof damage to the house located at 1200 Albert Street, sustained as a result of hail from the April 25, 2015, thunderstorm. Maison sent an adjuster to the house who, after concluding that the roof had been damaged in the 2015 storm, estimated that the replacement cost value for the damage was $11,899.26. The adjuster valued the depreciation of the damaged area at $3,270.51 and, subtracting the amount of depreciation from the replacement cost value, determined that the actual cash value for the house was $8,628.75. After subtracting the policy’s $1,000 deductible, Maison sent a check to the Bosses in the amount of $7,628.75 as payment for the claim.
The Bosses subsequently requested the full amount of the replacement cost value from both Access and Maison. After each insurer denied the request, the Bosses filed suit against the insurers on April 21, 2017, seeking declaratory relief as well as damages and penalties. The Bosses reasoned that under the terms of each insurer’s policy, they were entitled to the full amount of the replacement cost value; by failing to tender the full amount of the replacement cost value and paying only the actual cash value, the insurers breached their respective insurance contracts, and thus each insurer owed penalties under the Louisiana Insurance Code.
After answering the petition, each insurer filed a motion for summary judgment, seeking dismissal of the Bosses’ claims. Access and Maison both asserted that under the unambiguous terms of their respective policies, the payment of the actual cash value satisfied their obligations. The Bosses filed a cross motion for summary judgment, seeking judgment in their favor.
The court granted the motions for summary judgment filed by Access and Maison. A judgment in conformity with the court’s ruling and dismissing the Bosses’ claims was signed on January 23, 2018. The Bosses appealed.
On appeal, the court pointed out that the typical replacement provisions contain no language as to when an insured must complete repair or replacement of the damaged property. The standard provisions do, however, require the insured to make a claim within a certain number of days, usually 180, to recover for replacement cost coverage.
Each of the Bosses’ policies contained this wording:
“You may disregard the replacement cost loss settlement provisions and make claim under this policy for loss or damage to buildings on an [ACV] basis. You may then make claim within 180 days after loss for any additional liability on a replacement cost basis.”
Acknowledging that they did not repair or replace the damage to the roofs of their houses within 180 days before they made their claims, the Bosses argued that under the plain language of the policies, they were entitled to receive a single payment of up to full replacement cost value contingent on completing the repairs or replacement without regard to any time limitation.
The court disagreed, stating that under the plain language of the policies, the replacement cost value was no longer available to the Bosses by the date they filed their claims. As such, there was no basis to support the Bosses’ demand for a declaration that the insurers’ respective policies afforded them the right to claim the full amount of the replacement cost value. Likewise, under the unambiguous terms of the policies, the Bosses failed to establish that the insurers breached the insurance contract and therefore could not show that they were entitled to penalties under the Louisiana Insurance Code. Therefore the trial court correctly dismissed their claims on summary judgment.
Bosse v. Access Home Insurance Company-Court of Appeals of Louisiana, First Circuit-December 17, 2018-2018 CA 0482.