Codified as § 33-24-102, Montana’s Valued Coverage Regulation offers that, within the occasion of a complete loss, the bounds in an actual property insurance coverage coverage conclusively set the true quantity of loss and measure of damages. In observe, worth coverage legal guidelines mandate {that a} whole loss routinely triggers an insurer’s obligation to pay the complete coverage limits, typically with out the necessity for a proof of loss or different investigation. 1 Any settlement to settle a declare for lower than the entire quantity of relevant protection is void as towards public coverage. 2
Much less clear is the interplay between a price coverage legislation and supplemental coverages, that are paid as incurred, comparable to prolonged dwelling or legislation and ordinance protection. Whereas Montana courts haven’t had trigger to guage this interplay, different courts in worth coverage legislation states have. In Langhorne v. Fireman’s Fund Insurance coverage Firm, the Northern District of Florida held that the insurer was not obligated to pay prolonged alternative price protection till incurred.
Within the courtroom’s view, there isn’t any battle between the EERC [extended replacement cost coverage] endorsement within the coverage and the plain, unambiguous language of the [value policy law]. The courtroom due to this fact concludes that as a result of thus far plaintiff has not ‘really expended’ any quantity to restore, rebuild, or change his dwelling, defendant has no obligation to pay him underneath the ERCC endorsement. 3
The Florida Supreme Courtroom later thought of and finally accepted the Langhorne reasoning when deciding Ceballo v. Residents Property Insurance coverage Company, the same case. It discovered that the insureds have been “entitled to, and obtained, the face worth of their insurance coverage coverage for the lack of their house, however that loss doesn’t have an effect on their obligation to indicate that they’ve incurred a further loss with the intention to get well underneath the supplemental protection.” 4
Whereas Florida’s statute is barely totally different than Montana’s, in Florida, the valued coverage legislation doesn’t apply to supplemental coverages. Langhorne and Ceballo present perception into how courts interpreted and differentiated coverages that impose no situations above and past sustaining a lined loss and supplemental coverages which can be conditioned on incurring related prices. Whereas there isn’t any assure {that a} Montana courtroom would come to the identical conclusion, these opinions from Florida would probably be thought of persuasive ought to the difficulty come up.
1 Britton v. Farmers Ins. Grp. (Truck Ins. Exch.), 721 P.2nd 303, 307 (Mont. 1986) (citing Industrial Union Ins. Co. v. Stanmike Funding Co., 475 S.W.2nd 295 (Tex.C.A.1971)).
2 Stanmike Funding, at 307 (citing Coddington v. Safeguard Ins. Co. of N.Y., 373 S.W.2nd 413 (Ark. 1963).
3 Langhorne v. Fireman’s Fund Ins. Co., 432 F. Supp. 2nd 1274, 1279 (N.D. Fla. 2006).
4 Ceballo v. Residents Prop. Ins. Corp., 967 So. 2nd 811, 815 (Fla. 2007).