Depreciation of Labor in Property Insurance Claims: Guidance From Recent Cases

Advocating From Insurer and Policyholder Perspectives

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, October 30, 2019

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will address the application of depreciation to the labor cost component of estimated replacement cost value in determining actual cash value (ACV) under homeowners' and commercial property insurance policies. The panel will provide practical guidance regarding labor costs and other non-physical cost items, such as contractor overhead and profit and whether these items should be depreciated in reaching an ACV adjustment of a property insurance claim. The panel will also address issues from both policyholder and insurer perspectives, discuss ongoing litigation and recent decisions showing that courts continue to reach conflicting results, and explain effective arguments in advocating for or against these claims.

Description

Recent decisions are in conflict on whether labor costs may be depreciated in valuing property losses. For example, one court found recently that an insurer breached its obligations under an ACV valuation provision by depreciating mixed costs (costs representing both labor and materials) in a claim for hail damage and that by doing so, the insurer improperly depreciated the cost of labor. Other courts, however, have allowed the depreciation of labor costs. For example, labor costs for installing a new roof after hail damage were deemed "replacement costs" and were depreciable under a property insurance policy defining reimbursable "actual cash value" as "replacement cost of the property at the time of loss less depreciation."

Listen as our authoritative panel of insurance practitioners analyzes whether labor costs and other non-physical cost items, such as contractor overhead and profit, should be depreciated in reaching an ACV adjustment of a property insurance claim. The panel will also address issues involved from both policyholder and insurer perspectives, discuss ongoing litigation and recent decisions, and demonstrate compelling arguments in advocating for or against these claims.

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Outline

  1. Overview
  2. Recent cases
  3. Policyholder perspectives
  4. Insurer perspectives
  5. Best practices and case studies
  6. Final considerations

Benefits

The panel will review these and other key issues:

  • Which jurisdictions generally allow for depreciation of labor in property claims?
  • What are the most important lessons from recent cases?
  • What are compelling arguments in advocating for or against these claims?

Faculty

Held, Jonathan
Jonathan C. Held

President and CEO
J.S. Held

Mr. Held has consulted on many of the largest and most complex catastrophic insurance claims in history, including the...  |  Read More

Oehninger, Sergio
Sergio F. Oehninger

Counsel
Hunton Andrews Kurth

Mr. Oehninger represents companies in complex insurance coverage and bad faith disputes nationally and internationally....  |  Read More

Raschke, Heidi
Heidi Hudson Raschke

Shareholder
Carlton Fields

Ms. Raschke has spent her legal career representing commercial insurance clients in complex coverage disputes. She...  |  Read More

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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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