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An insured in an action on a policy insuring property or a dwelling to the extent of its actual cash value at the time of loss, but
not exceeding the amount it would cost to repair or replace, properly alleges actual cash value as damages; [FN85] the cost of repair or replacement has to be pleaded defensively by the insurer, since the actual cash
value is the basic measure of loss. [FN86]
Observation: In some jurisdictions if this defense is not affirmatively pleaded in an answer by the insurer, it is waived and lost. In addition, the insurer should request that an interrogatory be submitted to
the jury that determines the market value as well as repair or replacement cost in order to determine how the jury arrived at any potential award. This will help prevent an inconsistent verdict.
Nevertheless, under such a provision covering "actual cash value of the property at the time of loss, but not exceeding the amount which it would cost to repair or replace the property with
material of like kind or quality within a reasonable time after such loss," a jury is entitled to award damages based on replacement cost where, following the insureds' presentation of evidence of such cost, the
insurer did not argue that it exceeded market value or make any effort to establish the property's market value. [FN87] |
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