I’ve just posted the new regulations promulgated by the Tennessee Department of Commerce and Insurance governing the investigation and disposition of claims arising under certain types of insurance issued to residents in Tennessee.  We’ve attended the hearings that were held on these regulations, and followed the rulemaking process.  Regulation 0780-01-05-.010, entitled Standards for Prompt, Fair and Equitable Settlements Applicable to Fire and Extended Coverage Type Policies with Replacement Cost Coverage, contains two provisions which may expand fire insurer’s obligations when calculating replacement cost:

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I recently learned that Tennessee Farmers Mutual Insurance Company (Farm Bureau) has changed the way it will pay roof claims.  Specifically, a recent endorsement changes roof coverage to actual cash value for roofing materials instead of replacement cost.  This means that roof materials will be depreciated in the event of a roof claim.  For example,

In most cases, the answer is no. Most policies use replacement cost at a specific location as a measure of the maximum recovery that can be afforded under a property insurance policy. Most policies contain a “Valuation” condition similar to the following:

B.         Replacement Cost – When replacement cost is shown on the “declarations” for covered property,