We have an insured who suffered fire losses to the same location during a 5-month span. The first loss is a total loss with roughly a million-dollar limit. The second loss, which was to the area of the building not completely damaged prior, is also a total loss. When I say total loss, the building limits would be exhausted on both claims. It appears that they were severely underinsured. The repairs on the first claim had not begun and they have not informed the insurer of their intention to repair. Can the insured collect policy limits twice, even though the first loss will reach limits and no repairs had been made prior to the second claim?

Illinois Subscriber

The policy pays per occurrence of loss, so there is nothing in the policy to indicate that the limit of insurance would not apply to the second fire loss. However, in order to answer this question accurately, we will need to know what valuation was used to insure the property. Does the coinsurance condition apply? If so, then the building would not meet the coinsurance condition and thus the limit of insurance would not be adequate to provide any additional limit of coverage. Also, would the vacancy provision apply at the time of the second fire loss? If so, then the vacancy penalty would also apply. But if the building is insured on an agreed value or replacement cost basis, then there will be coverage at the limit of insurance shown in the declarations for each of the loss occurrences.