Loss Settlement – covered damage to a building is reported in excess of 180 days from the date of loss (but within two years). The delay is not prejudicial to the company. Section d. and e of the loss settlement is creating some confusion. Is there a way for the insured to be eligible for replacement cost since they cannot notify us of their intent to do so within 180 days? Where would an actual cash value payment fall into this?

Illinois Subscriber

The option to take acv instead of replacement cost, with claiming replacement cost within 180 days of the date of loss, is a conscious decision by the insured. Look at the wording; it states that the insured may DISREGARD the replacement cost settlement and opt for ACV, and that he can change his mind with notification to the carrier within 180 days of the loss. The carrier pays acv until the repairs are complete, but then the replacement cost difference is paid. For example; an insured has a fire, and begins repairs. He is paid acv until the repairs are complete, and then is paid the difference. His neighbor has a fire and says no, he's not claiming replacement cost; he may do something different with the porch that burned so he opts to take acv and call it a day. The neighbor then has 180 days from the date of the loss to change his mind and tell the carrier Hey, I'm going to repair it after all, and I want the replacement cost on the porch. That's the difference between D and E. See E below.

e.You may disregard the replacement cost loss settlement provisions and make claim under this policy for loss to buildings on an actual cash value basis. You may then make claim for any additional liability according to the provisions of this Condition D. Loss Settlement, provided you notify us, within 180 days after the date of loss, of your intent to repair or replace the damaged building.