You answered a similar query from me several months back. Specifically, that question asked whether the ACV of building repairs needed to be exceeded prior to making claim for depreciation holdback funds. You opined “there is nothing in the policy that states that the property must be replaced before the ordinance and law additional coverage is to be provided; all the policy says is that the ordinance and law amount must be incurred (emphasis added), not that the repairs must be completed”.

My question now involves the highlighted words, “must be incurred”. The insured’s general contractor made several of the code related repairs (primarily electrical) and has invoiced the insured for this portion of the code work. The insurance company has taken the position that they will not release those funds until the insured provides a cancelled check for this expense. However, the insured does not have the funds necessary to pay the general contractor until the carrier releases those funds (a classic “catch-22”).