8th Circ. Flips Axis Win In Coinsurance Penalty Dispute

Law360, New York (May 23, 2013, 7:11 PM EDT) -- The Eighth Circuit held Thursday that Axis Surplus Insurance Co. could not reduce property coverage by using replacement cost, instead of market value, to calculate coinsurance requirements, according to a published opinion that interprets standard policy language.

Overturning an earlier decision in the suit, the federal appeals court found that Arkansas law required the lower actual cash value of Buddy Bean Lumber Co.'s mills to be used to determine the lumber company's coinsurance obligation, a ruling that hands Buddy Bean substantially more coverage.

Coinsurance provisions are...
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