Actual Cash Value and Broad Evidence Value Settlements

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Actual Cash Value and Broad Evidence Value
Settlements
Our o ce recently assisted two
semi-truck claims. With both claims, comparable
vehicles to set valuations.
truckers with big
the insurers found
We, of course, had to ascertain that the values
oered were adequate. They were not but
eventually, we concluded the claims. I made
the argument that the comparable vehicles had to
be in the local area unless the insurer paid for
transportation to allow the insured to bring the
truck to his area. It seemed only fair that the
insurer would pay for transportation of the big
truck when they said, here is a comparable, go
get it! However, the insurer responded with the
statement that "we are only going to pay
Actual Cash
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Value. (ACV is usually considered the
replacement that costs less depreciation.) One
of the insurers realized the validity of our
argument and found a comparable vehicle in the
local market but the other, Farm Bureau, did not
after the Super Dump Truck was located at the
other end of the country. The term Actual Cash
Value is found on seven pages in the insureds
policy but the term is not de?ned under the
de?nitions. Because of the lack of de?nition,
insureds in other cases similar to this one,
have had to ask a court for interpretation,
noting that Actual Cash Value is frequently
understood to mean replacement cost minus
depreciation. While that de?nition remains a
part of the idea of actual cash value, the
de?nition used by many courts has been expanding
over the years. The de?nition most often used
today incorporates what is known as the broad
evidence rule. The Broad Evidence Rule is a
valuation that does not adhere to the principle
that the traditional measure of actual cash
value (ACV) is the sole measure of value at the
time of loss. This rule provides for the
examination of every standard of value having a
bearing on the property under consideration. In
its simplest terms, the broad evidence rule means
that the determination of the actual cash value
of any property should include all relevant
evidence an expert would use to set the value of
the property, including replacement cost less
depreciation and fair market value (which takes
into account location, obsolescence, the present
value of expected income from the property, and
economic conditions at the time of the loss).
The rule applies equally to real property and
personal
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property, commercial property and personal lines
property, ?xed equipment, mobile equipment,
semi-trucks, and automobiles. Since Farm Bureau
is clinging to the idea that the insured must
absorb the shipping cost to obtain a settlement,
allowing Farm Bureau to reap a windfall in the
process, we are going to have to call in
reinforcements, because we are right on this one
and at Brown - OHaver we always ?ght for our
clients. Original Article https//www.brown-oha
ver.com/blog/actual-cash-value-and-broad
-evidence-value-settlements/