We have an insured who owns a three story apartment building insured on the ISO Building and Personal Property Coverage Form, CP 00 10 10 91. One end of the building sustained a very substantial loss. That end of the building will have to be demolished and rebuilt. The other end was not damaged.

The insured would like to demolish the damaged end of the building and instead of rebuilding that end of the building, use the insurance proceeds to purchase a different apartment building in another area of town. He could do this with the actual cash value (ACV) settlement, but he would like to get replacement cost settlement and use the replacement cost settlement to purchase a different building. If the replacement building is as expensive or more expensive than the demolished portion of the original building, can he demand to get replacement cost in lieu of ACV on his claim settlement and use this for the building in the other part of town?

Pennsylvania Subscriber