230 R.I. Code R. 230-RICR-20-40-2.9 - Standards for Prompt, Fair and Equitable Settlements Applicable to Fire and Extended Coverage Type Policies with Replacement Cost Coverage

A. Replacement Cost

1. When the insurance policy provides for the adjustment and settlement of first party claimant losses based on replacement cost, the following shall apply:

a. When a loss requires repair or replacement of an item or part, any consequential physical damage incurred in making such repair or replacement not otherwise excluded by the policy, shall be included in the loss. The first party claimant shall not have to pay for betterment nor any other cost except for the applicable deductible.

b. When a loss requires replacement of items and the replaced items do not match in quality, color or size, the insurer shall replace all such items so as to conform to a reasonably uniform appearance. This applies to interior and exterior losses. The first party claimant shall not bear any cost over the applicable deductible, if any.

B. Actual Cash Value

1. When the insurance policy provides for the adjustment and settlement of losses on an actual cash value basis on residential fire and extended coverage, the Insurer shall determine actual cash value as follows: replacement cost of property at time of loss less depreciation, if any. Upon the first party claimant's request, the insurer shall provide a copy of the claim file worksheet(s) detailing any and all deductions for depreciation.

2. In cases in which the first party claimant's interest is limited because the property has nominal or no economic value, or a value disproportionate to replacement cost less depreciation, the determination of actual cash value as set forth above is not required. In such cases, the insurer shall provide, upon the first party claimant's request, a written explanation of the basis for limiting the amount of recovery along the amount payable under the policy.

Notes

230 R.I. Code R. 230-RICR-20-40-2.9

Amended effective 6/11/2019
Amended effective 12/24/2019
Amended effective 2/23/2025