A Washington appeals court ruled that a coinsurance provision should be applied to the replacement cost of damaged property in Wetmore v. Unigard Ins. Co., No. 53061-5-I, 2005 WL 407366 (Wash. App. Feb. 22, 2005).
The Majestic Inn was insured under a commercial multiline policy issued by Unigard Insurance. The policy contained a 90 percent coinsurance provision. A fire damaged the inn, and the owners, the Wetmores, made a claim on an actual cash value basis for $949,000. The Wetmores later made a claim for additional replacement cost coverage for $776,000—the difference between the policy limits and the actual cash payment they had already received. Unigard disagreed with the amount of the additional claim.
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