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Class Actions Based on Wrongful Application Of Labor Depreciation In Property Insurance Claims Are Active In Missouri

April 10, 2015 | Thomas Rice

Three separate class actions have been filed in Missouri challenging how depreciation is used in calculating the actual cash value of property damage under homeowners and commercial property insurance policies. In the past insurers used replacement-cost-less-depreciation to calculate actual cash value. This calculation takes the entire estimated replacement cost of property (materials, labor and other items) and depreciates the property based on age and condition. The Missouri class actions allege only materials should be depreciated as a component of the replacement cost, and labor should not be depreciated.

The Missouri class actions raising the labor depreciation issue are McLaughlin v. Fire Insurance. Exchange., 1316-CV11140 (16th Circuit Court for Jackson County, Mo.); Bellamy v. Nationwide Affinity Insurance Company, 1516-CV06346 (16th Circuit Court for Jackson County, Mo.); and Riggins v. American Family Mutual Insurance Company, 2:14-cv-04171-NKL (W.D. Mo.). No rulings on the merits or class certification in any of the three class actions have been rendered.


Related Services: Insurance
Attorneys: Thomas Rice

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The BSCR Insurance Blog examines topics and developments of interest to insurance carriers, with a particular focus on Missouri and Kansas law. Learn more about the editor, Angela M. Higgins, and our Insurance practice.

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