Assurance Company of America vs. Adbar

(8th U.S. Circuit Court of Appeals, Missouri, April 29, 2005)
—Ruling: Insured entitled to actual cash value for building damaged by fire

This case involved the insured’s purchase of a building for $40,000 intending to replace or renovate it. The insurer issued the insured a commercial fire policy, listing in its declarations coverage for any one structure as $450,000, subject to the policy’s Builders Risk Coverage Form. The building was damaged by fire and the insured contended that it was entitled to recover $450,000, the declared value of the building, pursuant to the Missouri “value policy” statute. The court rejected the insured’s argument as contrary to the plain language of the policy, which provided, among other things, that the insurer would pay the actual cash value as of the time of loss to any existing building or structure.

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