ACV and Fires in RI

Rhode Island has a unique law, “Insurance Regulation 73,” that specifically governs how depreciation is applied to “house fire” claims. This regulation dictates the depreciation calculation methods for insurers, which can be particularly significant if the property is vacant or in poor condition. Further details are available in the 16-page PDF document. See Insurance Regulation 73

Actual Cash Value

(1) When the insurance policy provides for the adjustment and settlement of losses on an actual cash value basis on residential fire and extended coverage, the Insurer shall determine actual cash value as follows: replacement cost of property at time of loss less depreciation, if any. Upon the first party claimant ‘s request, the insurer shall provide a copy of the claim file worksheet(s) detailing any and all deductions for depreciation.

(2) In cases in which the first party claimant ‘s interest is limited because the property has nominal or no economic value, or a value disproportionate to replacement cost less depreciation, the determination of actual cash value as set forth above is not required. In such cases, the insurer shall provide, upon the first party claimant ‘s request, a written explanation of the basis for limiting the amount of recovery along the amount payable under the policy.

Section 9, B (1 & 2) within R.I. Gen. Laws §§ 27-9.1-1 et seq