Actual Cash Value or Replacement Cost on Farm Outbuilding?

Our farmowners client is covered on a American Association of Insurance Services (AAIS) policy. Our insured has suffered a wind loss that destroyed one of the structures on his farm. The insurer has offered an actual cash value settlement under coverage B (related private structures), and we believe it should be settled on a replacement cost basis.

The insurer has taken the position that this structure was a farm outbuilding (chicken house) converted to a garage and should have been insured as a normal outbuilding (ACV). When we applied for replacement cost coverage, we sent pictures showing the structure as a garage. If the insurer felt it should have been written as an outbuilding, they had the pictures and should have made such a request at the time the policy was issued.