SECTIONS 2050-2060 - California Statutes

INSURANCE CODE

SECTION 2050-2060

2050. The effect of a valuation in a fire policy is the same as in
a marine policy.

2051. (a) Under an open policy, the measure of indemnity in fire
insurance is the expense to the insured of replacing the thing lost
or injured in its condition at the time of the injury, the expense
being computed as of the time of the commencement of the fire.
(b) Under an open policy that requires payment of actual cash
value, the measure of the actual cash value recovery, in whole or
partial settlement of the claim, shall be determined as follows:
(1) In case of total loss to the structure, the policy limit or
the fair market value of the structure, whichever is less.
(2) In case of a partial loss to the structure, or loss to its
contents, the amount it would cost the insured to repair, rebuild, or
replace the thing lost or injured less a fair and reasonable
deduction for physical depreciation based upon its condition at the
time of the injury or the policy limit, whichever is less. In case of
a partial loss to the structure, a deduction for physical
depreciation shall apply only to components of a structure that are
normally subject to repair and replacement during the useful life of
that structure.

2051.5. (a) Under an open policy that requires payment of the
replacement cost for a loss, the measure of indemnity is the amount
that it would cost the insured to repair, rebuild, or replace the
thing lost or injured, without a deduction for physical depreciation,
or the policy limit, whichever is less.
If the policy requires the insured to repair, rebuild, or replace
the damaged property in order to collect the full replacement cost,
the insurer shall pay the actual cash value of the damaged property,
as defined in Section 2051, until the damaged property is repaired,
rebuilt, or replaced. Once the property is repaired, rebuilt, or
replaced, the insurer shall pay the difference between the actual
cash value payment made and the full replacement cost reasonably paid
to replace the damaged property, up to the limits stated in the
policy.
(b) (1) Except as provided in paragraph (2), no time limit of less
than 12 months from the date that the first payment toward the
actual cash value is made shall be placed upon an insured in order to
collect the full replacement cost of the loss, subject to the policy
limit. Additional extensions of six months shall be provided to
policyholders for good cause. In the event of a loss relating to a
"state of emergency," as defined in Section 8558 of the Government
Code, no time limit of less than 24 months from the date that the
first payment toward the actual cash value is made shall be placed
upon the insured in order to collect the full replacement cost of the
loss, subject to the policy limit. Nothing in this section shall
prohibit the insurer from allowing the insured additional time to
collect the full replacement cost.
(2) In the event of a covered loss relating to a state of
emergency, as defined in Section 8558 of the Government Code,
coverage for additional living expenses shall be for a period of 24
months, but shall be subject to other policy provisions, provided
that any extension of time required by this paragraph beyond the
period provided in the policy shall not act to increase the
additional living expense policy limit in force at the time of the
loss. This paragraph shall become operative on January 1, 2007.
(c) In the event of a total loss of the insured structure, no
policy issued or delivered in this state may contain a provision that
limits or denies payment of the replacement cost in the event the
insured decides to rebuild or replace the property at a location
other than the insured premises. However, the measure of indemnity
shall be based upon the replacement cost of the insured property and
shall not be based upon the cost to repair, rebuild, or replace at a
location other than the insured premises.
(d) Nothing in this section shall prohibit an insurer from
restricting payment in cases of suspected fraud.
(e) The changes made to this section by the act that added this
subdivision shall be implemented by an insurer on and after the
effective date of that act, except that an insurer shall not be
required to modify policy forms to be consistent with those changes
until July 1, 2005. On and after July 1, 2005, all policy forms used
by an insurer shall reflect those changes.

2052. Whenever the insured desires to have a valuation named in his
policy insuring any building or structure against fire, he may
require such building or structure to be examined by the insurer and
the value of the insured's interest therein shall be fixed at that
time by the parties. The cost of the examination shall be paid by the
insured.

2053. A clause shall be inserted in such a valued policy, stating
substantially that the value of the insured's interest in the insured
building or structure has been thus fixed.

2054. In the absence of any change increasing the risk without the
consent of the insurer or of fraud on the part of the insured, and
except as provided in Sections 2056 and 2058, the insurer under such
a valued policy shall pay losses as follows:
(a) In case of a total loss, the whole amount insured upon the
insured's interest in such building or structure, as stated in the
policy and upon which the insurers have received a premium.
(b) In case of a partial loss the full amount of the partial loss.
(c) In case there are two or more policies covering the insured's
interest, each policy shall contribute pro rata to the payment of
such whole or partial loss.

2055. Except as provided by section 2056, the insurer shall not be
required to pay more than the amount stated in such a valued policy.

2056. Stipulations in a valued policy concerning the repairing,
rebuilding or replacing of buildings or structures wholly or
partially damaged or destroyed shall prevail over the provisions of
sections 2054 and 2055.

2057. Under a contract of fire insurance, payment to the insured
shall be made within 30 days after the amount of the loss and the
liability of the company have been agreed upon or settled by the
insured and the company in writing.
If the company fails to pay within the 30 days, the payment shall
bear interest, beginning the 31st day, at the prevailing legal rate.
The company also shall be liable for all costs of collection,
including reasonable attorneys' fees, if legal action is necessary to
obtain payment after the company has willfully failed to pay within
the 30 days.

2058. Notwithstanding any other provision of law, if a loss arising
out of fire is rebuilt or replaced, an insured covered by a valued
policy shall receive full payment for the loss up to the face amount
of the policy. If the loss is not rebuilt or replaced, an insured
covered by a valued policy shall receive either the replacement value
of the loss or the face amount of the policy, whichever is less. As
used in this section, "valued policy" has the meaning set forth in
Section 412.
This section applies only to valued policies issued or renewed on
and after July 1, 1992.

2060. In the event of a loss under a homeowners' insurance policy
for which the insured has made a claim for additional living
expenses, the insurer shall provide the insured with a list of items
that the insurer believes may be covered under the policy as
additional living expenses. The list may include a statement that the
list is not intended to include all items covered under the policy,
but only those that are commonly claimed, if this is the case. If the
department develops a list for use by insurers, the insurer may use
that list.