noting that disallowing depreciation deductions under an actual cash value policy in the event of a partial loss would “plac[e] Pennsylvania in a minority position among the states”
How later courts described this case
- noting that disallowing depreciation deductions under an actual cash value policy in the event of a partial loss would “plac[e] Pennsylvania in a minority position among the states”
- by defining “actual cash value” as “the cost to repair or replace the damaged property less deduction for physical deterioration (depreciation) and obsolescence,” the insurer did “exactly as the Farber court advised”
Written by the judges who cited it.
The opinion
SCHILLER, Judge,
concurring and dissenting:
I agree with the Majority Opinion that the Court of Common Pleas correctly granted summary judgment in favor of the Insurance Placement Facility (“Facility”) on the question of bad faith. However, unlike the Majority, I would also affirm the trial court’s grant of summary judgment in favor of the landowners on the breach of contract claim.
According to the argument advanced by the Facility, the insurable interest of properties ordinarily decline each year due to “depreciation” and its responsibility to pay for the repair to such properties should also decline. However, the Facility itself does not seem to have treated the insurable interest of these properties as in decline for purpose of charging premiums, because premium payments were not modified downward to reflect the alleged depreciated interest. 1 To my mind, this course of conduct by the Facility indicates either an intention to fully cover the properties up to the policy limits, or the collection of premiums in excess of the coverage it was actually providing: if the latter is true that fact should have been annually communicated to the insureds so that they could have adjusted their coverage. Moreover, given the social policy reasons which led to the enactment of the enabling legislation, I believe that an interpretation which favors the prevention of urban blight should be accorded these insurance contracts.
. This fact was admitted by counsel for the Facility during oral argument to this Court.