I have a client who sustained damage to his apartment building. The policy in force is a CP 0010 (10/12). The building LOL is roughly $1MM. It is written on a RCV basis and 80% co-insurance. It also contains a large deductible ($25k).
The agreed RC loss for direct building damage is $420k and code enforcement damages of $25k. Under “additional coverages”, the CP 0010 provides for $10k of coverage for “increased cost of construction” (ICC).
The question is this:
Is recovery limited to $405k {$420k (direct damage) - $25k (policy deductible) + 10k (ICC limit)}?
Or would it be $420k {$420k (direct damage) + $25k (code loss) - $25k (policy deductible)}?

Massachusetts Subscriber

In the CP 00 10, the additional coverage for increased cost of construction is not available for payment until the property is actually repaired or replaced. As such, the calculation of the deductible will be applied to the damaged covered property loss occurrence before application of the additional coverage, as you have stated here:
The question is this. Is recovery limited to $405k {$420k (direct damage) - $25k (policy deductible) + 10k (ICC limit)}? Yes, this is the correct calculation.