Value Policy Statutes

Not every state has a regulation or law regarding paying policy limits when the structure is a total loss.  Adjusters should be aware of their state’s particular statute.

 

Scroll to the bottom of the chart for more information. 

This chart is current as of the date I wrote it, but adjusters should be familiar with their state’s rules. I cannot guarantee the accuracy of the list. Because laws and regulations can change without notice, an attorney should be contacted if there are any questions regarding this chart. These materials are provided for informational and educational purposes only and do not constitute legal advice or legal opinions because I am not an attorney.

STATE
STATUTE
TYPE OF PROPERTY
Alabama
N/A
N/A
Alaska
N/A
N/A
Arizona
N/A
N/A
Arkansas
A.C.A. § 23-88-101
All Real Property
California
Cal. Ins. Code § 2054, § 2056, § 2058
Buildings
Colorado
N/A
N/A
Connecticut
N/A
N/A
Delaware
N/A
N/A
Florida
Fla. Stat. § 627.702
Any building (including mobile and manufactured homes)
Georgia
O.C.G.A. § 33-32-5
1 or 2 family residential buildings
Hawaii
N/A
N/A
Idaho
N/A
N/A
Illinois
N/A
N/A
Indiana
N/A
N/A
Iowa
N/A
N/A
Kansas
K.S.A. § 40-905
All Real Property
Kentucky
N/A
N/A
Louisiana
LSA-R.S. 22:1318
Immovable Property
Maine
N/A
N/A
Maryland
N/A
N/A
Massachusetts
The state follows a modified valued policy law known as premium refund law. Chapter 175 Section 96
Michigan
N/A
N/A
Minnesota
65A.08
All property
Mississippi
Miss. Code Ann. § 83-13-5
Buildings
Missouri
§ 379.140 R.S.Mo.
All property
Montana
Mont. Code Anno., § 33-24-102
Improvements to Real Property
Nebraska
44-501.02
Real Property
Nevada
N/A
N/A
New Hampshire
RSA 407:11
Buildings
New Jersey
N/A
N/A
New Mexico
N/A
N/A
New York
N/A
N/A
North Carolina
The state follows a modified valued policy law known as premium refund law. 58-43-10
North Dakota
N.D. Cent. Code, § 26.1-39-05
Real Property
Ohio
ORC Ann. 3929.25
Any Building
Oklahoma
N/A
N/A
Oregon
N/A
N/A
Pennsylvania
N/A
N/A
Rhode Island
N/A
N/A
South Carolina
S.C. Code Ann. § 38-75-20
All Real Property
South Dakota
S.D. Codified Laws § 58-10-10
Real Property
Tennessee
Tenn. Code Ann. § 56-7-801/56-7-802/56-7-803
Any Building
Texas
862.053
All Real Property
Utah
N/A
N/A
Vermont
N/A
N/A
Virginia
N/A
N/A
Washington
N/A
N/A
West Virginia
W. Va. Code § 33-17-9
Real property
Wisconsin
Wis. Stat. § 632.05
Owner-occupied dwellings
Wyoming
The state follows a modified valued policy law known as premium refund law. 26-23-103
N/A

Alabama

There are currently no rules for this state. 

Alaska

There are currently no rules for this state. 

 

Arizona

There are currently no rules for this state. 

 

Arkansas

The law covers damage to all properties from fire and natural disasters except floods and earthquakes. It does not apply to personal property, detached or appurtenant structures. Depreciation is not considered because the insured may collect the full amount stated in the policy.

 

California

The law covers total loss to a building including all perils arising from any fortuitous cause except those that are specifically excluded. If there is a partial loss, the insured may obtain the whole amount of the loss. Policy provisions regarding repair or replacement of the building will take precedence over the statute. The insurer may pay more than the policy limit if there are stipulations in the policy which speak to this.

 

Colorado

There are currently no rules for this state. 

 

Connecticut

There are currently no rules for this state. 

 

Delaware

There are currently no rules for this state. 

 

District of Columbia

Unknown

 

Florida

The law covers any building (including mobile and manufactured homes)   

including all perils covered by the property policy. If there is a partial loss by fire or lightning, the insurer will pay the actual amount of the loss. The insurer can repair or replace the property, but it must return an equal portion of the premium to the premium the insured paid on the building in excess of the cost of replacement.

 

Georgia

The law only applies to family residential buildings which are completely destroyed by fire. The insurer must pay the value in the policy except to the extent of any depreciation between the date of the policy and the loss. The insurer is allowed to repair or replace the property at its own expense.

 

Hawaii

There are currently no rules for this state. 

 

Idaho

There are currently no rules for this state. 

 

Illinois

There are currently no rules for this state. 

 

Indiana

There are currently no rules for this state. 

 

Iowa

Insured/Premises owner must commence pest control measures within fourteen (14) days of a confirmation of bedbugs. Control of the pest is considered complete when there is no evidence of bedbug activity in the unit for fifty (50) days after the last application of treatment. The Iowa Admin. Code § 138.13 states in migrant labor camps successful measures should be taken to control bedbugs within the camp.

 

Kansas

The law covers real property, which is wholly destroyed by fire, tornado, windstorm, or lightning. The policy value is considered the true value of the property. However, this is not applicable to either new or existing policies if there is a 25% increase in coverage within 60 days before the loss.

 

Kentucky

There are currently no rules for this state. 

 

Louisiana

The law applies to fire insurance policies for immovable property only. If the insurer placed a value on the property and used it to determine premiums,  then in the event of a total loss, the insurer must pay that property value. Other methods can be used to compute the value of the loss as long as it is listed in the application and policy. Any provision that does not align with the statute is considered null and void.

 

Maine

There are currently no rules for this state. 

 

Maryland

There are currently no rules for this state. 

 

Massachusetts

The state follows a modified valued policy statute known as a premium refund law. The carrier is required to refund the premium for the amount of coverage in excess of the replacement cost which is limited to fire losses.

 

Michigan

There are currently no rules for this state. 

 

Minnesota

The law includes all properties and covers the full amount stipulated in the policy in both cases of total and partial loss. Policies on farm buildings or other structures may include a provision determining the amount of loss in connection with the repair or replacement of the insured property.

 

Mississippi

The law applies to fire insurance only. In the event the building is totally destroyed by fire, the insurer must pay the amount stated in the policy. The insurer is not allowed to attach a three-quarter clause to the fire insurance policy.

 

Missouri 

The statute covers loss or damage of real and personal properties by fire. In the 

event of a total loss, the insurer must pay the policy value less the depreciation of property between the time of the policy issuance and the loss. In a partial loss, the insurer must pay the comparable percentage of the total value as the damaged part bears to the whole property.

Montana

The law covers improvements on real property and is not limited to specific perils. In the event of a total loss, the value stated in the policy is taken as the true value of the property.   The loss must not be the criminal fault of the insured or insured’s assigns. The insurer may assert fraud in obtaining the policy as a defense.

 

Nebraska

The law covers loss of any real property by fire, tornado, windstorm, lightning, or explosion, and the property insured is wholly destroyed without criminal fault on the part of the insured or his or her assignee.  The amount of insurance written in such policy shall be taken conclusively to be the true value of the property insured and the true amount of loss and measure of damages.

 

Nevada

There are currently no rules for this state. 

 

New Hampshire

The statute covers buildings totally destroyed by fire or lighting. The insured value will be the actual value unless over-insurance was fraudulently obtained. In the event of a partial loss, the insured is allowed to recover the actual loss sustained.

 

New Jersey

There are currently no rules for this state. 

 

New Mexico

There are currently no rules for this state. 

 

New York

There are currently no rules for this state. 

 

North Carolina 

The state follows a modified valued policy law known as premium refund law. The carrier is required to refund the premium for the amount of coverage in excess of the replacement cost.

North Dakota

The law applies to real property damaged by any peril covered in the insurance policy. In the event of a total loss, the amount written in the policy is the true value of the property. If the loss happens within 90 days of an increase in policy limits of 25%, the loss payable is either the full value of the policy or the actual cash value or the replacement cost, whichever is lower.  This is not applicable to appurtenant or separate structures, which must be settled for actual replacement cost or actual cash value.

 

Ohio

Any building or structure damaged by fire or lightning is covered by the statute. In the event of a total loss, the full value of the policy must be paid. If the policy requires the building repairs or replacement to be completed in order for the insured to be paid the full policy limit, then the amount will be paid per the policy provisions.

 

Oklahoma

There are currently no rules for this state. 

 

Oregon

There are currently no rules for this state. 

Pennsylvania

There are currently no rules for this state. 

 

Rhode Island

There are currently no rules for this state. 

 

South Carolina

The law covers the total loss of real property by fire and requires the insurer  to pay the full amount of the policy.  In the event of a partial loss, the insured may recover the actual value of the loss. This excludes chattel or personal property.

 

South Dakota

The law covers real properties damaged by fire, lightning, and tornado.  In the  event of a total loss, the policy value is deemed as the true value of the property. If a total fire loss happens within 90 days of an increase of 25% of the policy limits, then the value of the property is determined by the policy. A loss of appurtenant property shall be paid for actual replacement cost or actual cash value unless a specific amount was assigned. Any claim for a building insured under a commercial blanket with one amount for two or more buildings shall be settled for actual replacement cost or actual cash value.

 

Tennessee

The law applies to any building damaged by fire.

T.C.A. § 56-7-801 – Stipulates that there is a period of 90 days after which a“fire insurance policy” is issued for an inspection to occur.  It prohibits any “fire insurance policy” being issued for an amount in excess of the fair market value of any building or structure;

T.C.A. § 56-7-802 – Specifies provision for a return of premium where buildings “totally destroyed by fire” were over-valued and too high a premium was charged. The law applies to “buildings within the state insured against loss by fire” which “are totally destroyed by fire”; and

T.C.A. § 56-7-803 – Stipulates about losses occurring more than ninety (90) days after policy inception.  The law provides that the value as shown on the application or policy shall be deemed reasonable and settlement shall be made 

on that basis.

 

Texas

The law only covers fire losses to any insured real property. In the event of a total loss by fire, the policy is deemed a liquidated demand for the full value of the policy. This does not cover personal property. This statute must be included in the fire insurance policy.

 

Utah

There are currently no rules for this state. 

 

Vermont

There are currently no rules for this state. 

 

Virginia

There are currently no rules for this state. 

 

Washington

There are currently no rules for this state. 

 

West Virginia

The law applies to fire insurance on real property. In the event of a total loss, the insured may collect the total value stated in the policy. In the event of a partial loss, the liability is the amount of the partial loss.

 

Wisconsin

The law covers damage to owner-occupied dwellings. An insurer may agree to replace the destroyed property with new material of similar size, kind, and quality. The value of the destroyed property occupied as a dwelling is determined by the value in the insurance policy.

 

Wyoming

The state follows a modified valued policy law known as the premium refund law. The carrier is required to refund the premium for the amount of coverage in excess of the replacement cost.