When are Expenses Incurred?

 

December 4, 2017

 

When an insured hires a builder to make repairs, signs a contract with the builder, have they in fact “incurred” the cost and be entitled to the portion of the holdback amount above the ACV be released? 

 

Ohio Subscriber

The policy doesn't define incurred, and courts generally refer to a standard dictionary since that is what insured's have access to. Merriam Webster online defines incurred as: to become liable or subject to: bring down upon oneself. Therefore the signing of a contract, even though no money has changed hands, can be seen as incurred expenses, and thus the holdback should be paid.