Allstate Vehicle and Property Labor Depreciation MI, TN Class Action

When an insured person makes a claim for property losses, how are the value of the property and its depreciation costs determined? The complaint for this class action alleges that Allstate Vehicle and Property Insurance Company does not properly calculate the value of properties because it subtracts depreciation for the value of labor.

Plaintiff Fillisa Huey owned a property that was insured by Allstate against damage. On or about February 4, 2017, the complaint says, “Huey’s dwelling located on the Insured Premises suffered direct physical loss caused by a covered named peril(s)…” In other words, the loss was covered by the policy; there was no exclusion against it. Allstate inspected and determined that the loss was covered. 

Allstate then had to make a calculation. It took the actual cash value (ACV) of the damaged property, then estimated the cost to repair or replace the damage with new materials, to arrive at the replacement cost value (RCV). It then subtracted depreciation from the RCV.

However, when it made the calculation, the complaint says, it subtracted depreciation for labor as well, “even though labor does not depreciate in value over time.” Thus, the complaint argues, Huey was given a figure that was lower than it should have been. 

The complaint says, “While an insurer may lawfully depreciate material costs when calculating the amount of an ACV payment owed to an isured, it may not lawfully withhold repair labor as depreciation under Allstate’s policy forms at issue… Allstate’s failure to pay the full cost of the labor necessary to return Huey back to her pre-loss condition left Huey under-indemnified and underpaid for her loss.”

The class for this action is all Allstate policyholders who made (1) a structural damage claim for property located in Mississippi or Tennessee, (2) which resulted in an ACV payment during the class period from which “non-material depreciation” was withheld from the policyholder; or which should have resulted in an ACV payment except for the withholding of non-material depreciation causing the loss to fall below the deductible. 

The class period is the maximum time allowed by law. See the complaint for more detail on the meaning of “non-material depreciation.” The class does not include claims arising from policies that expressly permit depreciation of labor in the text of the policy form or claims in which the initial ACV payment exhausted the limits of the insurance. 

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Allstate Vehicle and Property Labor Depreciation MI, TN Complaint

October 11, 2019

When an insured person makes a claim for property losses, how are the value of the property and its depreciation costs determined? The complaint for this class action alleges that Allstate Vehicle and Property Insurance Company does not properly calculate the value of properties because it subtracts depreciation for the value of labor.

allstate_labor_depreciation_in_acv_compl.pdf

Case Event History

Allstate Vehicle and Property Labor Depreciation MI, TN Complaint

October 11, 2019

When an insured person makes a claim for property losses, how are the value of the property and its depreciation costs determined? The complaint for this class action alleges that Allstate Vehicle and Property Insurance Company does not properly calculate the value of properties because it subtracts depreciation for the value of labor.

allstate_labor_depreciation_in_acv_compl.pdf
Tags: Breach of Contract, Depreciation of Labor Costs, Incomplete payment of benefits due, Insurance