Shouldn’t I get full replacement cost for my totaled air conditioner from the tree contractor’s insurance company?

UPDATED: Oct 1, 2022

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Shouldn’t I get full replacement cost for my totaled air conditioner from the tree contractor’s insurance company?

A tree removal contractor told me he got over confident and didn’t tie a rope
on a limb he was cutting to lower it to the ground. Instead he let it drop. It
hit a nub on the tree which made it fly toward my house landing on top of my
air conditioner totaling it. The replacement cost of the 2 year old unit was

His insurance company wants to settle for 2621.60. They said, ‘As a third
party insurer, we are responsible to pay the property owner the actual cash
value ACV of the damaged property therefore, depreciation is applied.’

Do I really have be out 655.40 because of the contractors bad judgement?
Thank you for your help.

Asked on December 19, 2018 under Insurance Law, Louisiana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

They are right: you are entitled to the current value (e.g. value after depreciation), not replacement cost. If $100 were, say, stolen from you, and you sued, you'd be able to get exactly that $100 back--not $100 plus inflation, not $100 plus interest, not $200 if you have a new job paying 1/2 as much, so it takes you twice as long to earn $100; just the actual value of what was stolen. The same principal applies to property damage or destruction: you get the value of what was destroyed, not the replacement cost. There are times when this could help someone--imagine someone given a car by a family member; they paid nothing for it, but get its value if totalled, putting them ahead. Unfortunately, in your case and many others, it hurts you, but the law still uses value, not replacement cost, as the measure.

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