Many property policies contain contractual limitation provisions. These policy provisions are valid and enforceable in most states. The provision limiting the amount of time policyholders have to complete the work paid for by their insurance company to one year is particularly problematic. When policy provisions like this exist, if the repair or replacement has not been completed within the time frame, the carrier only pays actual cash value (ACV). This is a fairly common provision. It should be noted that Ordinance and Law Increased Cost of Construction provision also has a time limitation to repair or replace, or there is no coverage for the increased cost of construction. Standard ISO language is two years, and other contracts limit to 365 days.
What can policyholders do if their policy has a repair time limitation provision?
With current market conditions, unavailability of labor and materials, and general supply chain issues prevailing, it is unlikely repairs or replacement of loss/damage can be completed within one year. As a result, they are at risk of waiving benefits they are entitled to under their policy if this is not addressed.
At AssuredPartners, our Real Estate team is well-versed in policy provisions, and how to make your insurance work for you. As a true partner, we are there to help from start to finish and can customize a plan for your real estate needs. Contact us today to discover a plan that’s right for you.
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