Tenn. Justices Side With Policyholders In Labor Costs Row

Law360 (April 16, 2019, 6:50 PM EDT) -- Tennessee's highest court ruled Monday that Auto-Owners Mutual Insurance Co. can only consider a decline in the cost of building materials when calculating how much to pay on homeowners' property damage claims, rejecting the insurer's bid to also trim the amounts owed for labor costs.

Ruling on a certified question from a federal court overseeing a putative class action against Auto-Owners, a unanimous Tennessee Supreme Court said the insurer cannot reduce repair labor costs when calculating the "actual cash value" owed to policyholders whose homes are damaged or destroyed.

According to court documents, actual cash value is the total cost of...

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