Q

Our client has a small warehouse insured on a CP 00 10 04 02. The building was completely destroyed and, since our insured does not intend to replace it, the insurer has agreed to an actual cash value settlement.

At issue, however, is the additional $5000 debris removal coverage, which will be needed when the building is completely leveled. The insurer states the building must be repaired or replaced before this amount can be paid.

We disagree. Can you help?

Kansas Subscriber

A

There are no requirements in the policy that the building be repaired or replaced before this coverage is available. The policy states that if the sum of the direct physical loss and debris removal expense exceeds the limit of insurance, or if the debris removal expense exceeds the 25 percent, then an additional $5000 for each location in one occurrence is available. Neither here nor under the loss payment conditions is the requirement for repair or replacing the building imposed on the insured.