I have an insured with a homeowners (3) policy who had a wind loss that took a few strips of aluminum siding off the front of his house and a few from the back side of the chimney. The siding can not be matched as to color or grain and the carrier's solution is to take a few strips off one of the lower sides of the house put those in where the damage is, where it will not be so noticeable and put the new ones back on the lower sides. What thoughts do you have on this claim?

 Pennsylvania Subscriber

The solution offered by the insurer is not in keeping with the HO 00 03 (such as the standard ISO form), which promises to pay "replacement cost of that part of the building damaged with material of like kind and quality and for like use; or the necessary amount actually spent to repair or replace the damaged building." By putting on old siding to replace old siding, the insurer is effectively providing an "actual cash value" settlement, which allows depreciation.

But that is not what the insured has been paying for. The replacement cost policies have traditionally been sold to give "new for old." Yes, this violates the principle of indemnification, but that is how the policies are marketed and that is what the insured pays additional premium for.

So, in this case, the insured had matching siding prior to the loss, and is entitled to new matching siding following the loss.

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