The loss settlement conditions of the property coverages of homeowners policies comprise an area where the policies of various insurers are likely to substantially differ. Thus, a somewhat more generic discussion is appropriate. The issues that arise under the loss settlement conditions involve the collision of and interaction between a number of concepts and policy provisions, including:
- policy limits;
- the concept of insurance-to-value and the effect of your failure to maintain sufficient insurance-to-value;
- the concept of actual cash value;
- the different forms of replacement costs coverage;
- the concept of increased costs of construction or repair due to the operation of new or different building code requirements or other such laws; and,
- the concept of repair or replacement with like kind and quality along with the related concept of betterment.
