An insured homeowner suffered $5,000 worth of covered wind damage to his roof as a result of a hurricane. The insured was paid for the loss on an actual cash value basis, but did not repair the roof until 10 months later. At that time, the insured sought the remaining holdback amount under a replacement-cost basis.
For purposes of this discussion, assume that the insured's HO-3 form requires him to notify the insurer of his intent to recover on a replacement-cost basis within 180 days after the date of loss. Would the insured be entitled to the holdback amount when it took him more than 180 days to repair his roof?
Whether the insured is entitled to the holdback amount depends upon whether (1) the insured put the insurer on notice within 180 days of the loss of his intent to seek recovery on a replacement-cost basis, and (2) the repairs where made within a reasonable amount of time (which, depending on the facts of a claim, could exceed 180 days).
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