The policy implies that the insured must rebuild to get replacement cost. Our insured is going to rebuild, but not just a private garage. He is going to rebuild a pole structure that will be used as an implement building and a place to house his automobiles. The adjuster is also implying that if the insured does not rebuild the same type building, replacement cost would not apply.

Ohio Subscriber

If, as you say, the company underwriter knew that he or she was accepting—under Coverage B—a converted chicken house, then the company is obliged to adjust that loss according to the procedure laid out for coverage B in the conditions—replacement cost.

 We realize that the definition of property covered might contain an "out" for the insurer. That provision says that coverage B does not apply to "buildings designed to be used for farming purposes, whether or not such buildings are currently used in connection with farming operations." However, that would apply only in the case of unscheduled outbuildings. Again, the insurer knew what it was getting and is obligated to honor the promises of the policy.

 Your insured is under no requirement to rebuild the same building as was there previously. Similarly, if the insured's frame, one-story home had been blown away, he could choose to replace it with a brick tri-level. However, what the insurer pays him for the converted chicken house is limited to the least of the following:

1. the coverage limit; 2. the cost to repair or replace the converted chicken house; 3. the amount the insured actually spends to replace the building.