Problems viewing this email? Click Here December 2, 2016      Q&A of the Week Coinsurance Clause and Actual Cash Value A California subscriber recently asked the following question: I was recently discussing the application of coinsurance with an independent adjuster friend of mine. We were discussing the fact that the insured would be better off claiming the loss at actual cash value (ACV) versus replacement cost. The policy coverage afforded a replacement cost coverage option and an 80 percent coinsurance policy requirement. The insured in this case was way underinsured. I demonstrated to my friend that the policy limit would be achieved at ACV, using a theoretical Fair Market Value/ACV as the basis for the coinsurance calculation of the ACV amount required to be carried. My friend mentioned later that he reviewed the policy and there was nothing to be found in the policy that required a coinsurance calculation to comply with the requirement if the insured elected to take ACV only. Does the coinsurance clause in a policy that affords a loss measure at replacement cost become inactive when the claim is made at ACV only or should the coinsurance clause still be applied using ACV values? Is the coinsurance clause waived at ACV? ANSWER: Unless wording in the policy states otherwise, generally, the coinsurance clause applies whether ACV or replacement cost valuation is chosen. The ISO CP 00 10 states that if a coinsurance percentage is shown in the declarations, the clause applies. Read More    What's New This Week in FC&S AAIS and ISO Personal Automobile Policy Comparison In July 2016 the American Association of Insurance Services (AAIS) released its first standardized personal auto program. Read More    Litigation Watch Bad Faith Discussion The estate of a tort victim, as the insured's assignee, commenced an action against the insurer alleging that bad faith caused an excess judgment. This case is Welford v. Liberty Insurance Corporation, 2016 WL 3360431. Read More    Fraud of the Week Agent Fraud – Florida AMOUNT: $48,000 An unlicensed person acting as an insurance agent was arrested following activity that resulted in the theft of at least $48,500 in escrow payments from 10 South Florida homeowners. Read More        FC&S Ask the Experts Did you realize that the Q&A section of FC&S is made up of questions submitted by subscribers like you? Paid subscribers to FC&S Online or print FC&S Bulletins are invited to submit insurance coverage questions to the editors. We'll provide a personalized opinion within five business days. (We'll let you know if it will be longer than that. Sometimes we have to gather research or other supporting materials). Who knows? Your question may be featured (anonymously) in the online Q&A of the Week or as an FC&S update. Submit your coverage interpretation question right to the editors of FC&S for quick and reliable information. Ask our expert staff a question by  clicking here.    Maximize Your FC&S  Online Subscription! FC&S editors regularly conduct web-based demos of the service. Feel free to contact Christine Barlow, cbarlow@alm.com, to set one up! They only take 30 minutes, a small investment of time that will help you learn all that FC&S Online has to offer.    Contact Us As always, your comments and questions are welcome. Contact us at: FC&S Department Phone: 800-543-0874 Fax: 859-692-2293 Email: eAlerts@nuco.com

FC&S Team Kelly Maheu, J.D. Publisher   Diane W. Richardson, CPCU Consulting Editor Christine G. Barlow, CPCU Managing Editor, FC&S   Diana B. Reitz, CPCU, AAI Consulting Editor David D. Thamann, J.D., CPCU, ARM Managing Editor, FC&S Bulletins   Emily Brunner Online/Print/Production Editor Susan L. Massmann, CPCU Managing Editor, Electronic Publications   Tosha Brinkman Marketing Manager Barry Zalma, Esq., CFE Contributing Editor   Donna Cozatchy Creative Director Hannah Smith, J.D. Staff Writer

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