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The insurer wins dispute over payment for roof repair



A federal appeals court has confirmed that a lower court ruling holding an insurance company is not required to take depreciation into account when calculating a payment for damaged ceilings.

In June 2016, a hailstorm damaged 31 townhouses managed by Canyon Springs at the Soaring Eagles in Colorado Springs, according to Monday's ruling by the 10th U.S. Circuit Court of Appeal in Denver Canyon Springs at the Soaring Eagles Townhome Owners Association Inc Country Mutual Insurance Co.

Bloomington, Illinois-based Country Mutual estimated total repair costs for damage to roofs, siding, doors and windows would be $ 1,031,295.13, and of the estimated cost of repairing the roofs was $ 758,634.35 . Canyon Springs only repaired the roofs and spent $ 761

,911.74.

Both the estimated and actual costs of the roof repairs were less than the association's policy deductible of $ 789,277.12, according to the decision.

Country Mutual issued a payment for the actual cash value of the damaged property but refused Canyon Spring's requirement that it pay for "depreciation returns" applicable to the roofs. Depreciation of returns refers to the costs of repairs that exceed the property's actual cash value at the time of the loss, according to a footnote to the judgment.

The association filed a lawsuit in the U.S. District Court in Denver, accusing the insurer of breach of contract, bad faith, and unreasonable delay / denial of insurance benefits, according to the decision.

The district court ruled in favor of the insurers and was upheld by a unanimous three-judge appeals board.

Referring to the policy, the judgment said, "like the district court, we conclude that the payment of compensation costs is clear in how it calculates the country's mutual liability for loss or damage."

The termination "begins with" the cost of repairing or replacing "and then applies the deductible, but not the depreciation," it says. This results in a negative number, and "the repair / replacement cost did not exceed the deductible. Thus, the calculation ends, because there are no compensable repair / replacement costs, "the decision said.

"We conclude from the unequivocal terms of the insurance policy that Country Mutual is not liable for amortization of the remainder," it said, to confirm the judgment of the Court of First Instance.

Lawyers in the case could not be reached for comment.


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