I am requesting your opinion on the "Functional Replacement Cost Endorsement" (F-4644).
The facts are as follows:
The attached three pages are included in the insurance policy on a 200-year-old residence. The HO 05 30, referenced on the first page ("Advisory Notice") is not a part of the policy. I've attached a copy of the dec sheets showing this to be accurate. The significance of this involves indented item #1 which addresses the replacement of "plaster walls or ceilings with building code required wallboards or ceiling boards".
The question is this. Wood lath & plaster, as well as rock lath & plaster, have not been conventional repair methods for many years. I believe that a "functional replacement" for these materials would be blue board and skim coat plaster. It would provide a similar smooth plaster finish, and represents the modern-day functional equivalent. The insurer contends that using sheetrock on walls and ceilings provides a functional equivalent. As you likely know, based on Xactimate pricing, sheetrock is significantly less expensive than blueboard and skim coat.
Do you have an opinion on this matter?
Massachusetts Subscriber
While the HO 05 30 is not on the policy the F-4644 is which uses the same definition of "functional replacement cost" as follows: "Functional replacement cost" means the amount which it would cost to repair or replace the damaged building with less costly common construction materials and methods which are functionally equivalent to obsolete, antique or custom construction materials and methods used in the original construction of the building.
The examples presented in the advisory notice are just that, examples of how the coverage may be applied. Your issue is one of definition as to what exactly is functionally equivalent material. As the terms are not defined, a standard desk reference is used. Merriam Webster online defines functional as: performing or able to perform a regular function, designed or developed chiefly from the point of view of use. Equivalent is defined as: equal in force, amount, or value, or corresponding or virtually identical especially in effect or function.
Since blueboard and skim coat are closer to plaster than regular drywall, and those materials are readily available, then the insured should receive the benefit of the doubt and those materials should be used. Since blueboard is readily available at Lowe's, it fits the definition of common construction materials and is less costly than plaster.