ACV Settlement and Deductible Applicability
February 1, 2010
The insured has a claim on a CP 00 10 04 02 policy. The insured had an ATM machine in her establishment that was not owned by her. The establishment was broken into, and the ATM was stolen. The client said that this is a business personal property claim under the policy and that we need to take a deductible. We feel that that, since the insured does not own the ATM, the settlement should be at ACV with the ATM owner and no deductible applied. Who is right?
Georgia Subscriber
We agree that the loss should be settled with the ATM owner for ACV, as replacement cost coverage does not apply to personal property of others unless the policy's extension of replacement cost coverage for the personal property of others is shown as applicable in the declarations.
The extension states that if personal property of others is subject to a written contract that governs the insured's liability for loss or damage to that item, the valuation will be based on the amount for which the insured is liable. Otherwise, it is valued at ACV. However, we do not see anywhere in the policy that states that a deductible would not apply. So, settlement should be at ACV with the ATM owner with a deductible applied.
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