Court Clarifies Insurers' Replacement-Cost Obligations

Law360, New York (June 18, 2014, 10:15 PM EDT) -- Amid the onslaught of Texas hail claims litigation,[1] one Texas federal district court recently confirmed that in order for an insured to receive any portion of a replacement-cost holdback under a property insurance policy, it must actually incur costs above and beyond the actual-cash-value payments tendered by the insurance carrier. The federal district court also reiterated that general contractor overhead and profit is only applicable to a property insurance claim when it is reasonably necessary to repair or replace the damaged property....

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