The cause of loss is covered, a tree crushed one side of the home requiring extensive demolition and rebuilding.
The insured has Guaranteed Replacement Cost Coverage as the coverage basis. It is listed on the dec page and he continues to qualify for this which the insurer does not dispute. They acknowledge this is the coverage basis that governs his loss.
The issue surrounds cosmetic matching. If you do not purchase, or fail to maintain qualification for Guaranteed Replacement Cost, you become insured at Replacement Cost Without Deduction for Depreciation. You will find the actual provisions starting on page 11 and continuing on page 12. The Replacement Cost Without Deduction For Depreciation is the only place you will see language excluding cosmetic matching. The language is not found in the Guaranteed Replacement Cost Coverage or anywhere else in the policy.
When challenged, the insurer cites the Perils Insured Against language "We insure for direct physical loss to property described in Coverages A and B" to mean all the cabinets, siding, shingles, flooring etc must be damaged in order for them to be included in the settlement. I disagree based upon the language. If the language in the Perils Insured Against meant what they say there would be no reason to have "cosmetic matching" excluded in the lesser coverage of Replacement Cost Without Deduction For Depreciation, it would already be excluded. Your thoughts are appreciated.
New Jersey Subscriber
The carrier is incorrect in their interpretation of the policy language. The language surrounding cosmetic matching applies ONLY if the insured does not meet the guaranteed replacement cost parameters. There is nothing that states that in order for guaranteed replacement cost to apply that the property must sustain a total loss; that makes no sense. The insured fulfilled the necessary requirements for guaranteed replacement cost, therefore the property should be repaired/replaced accordingly. You may find the attached articles helpful as well: The Matching Game and Preloss Conditions