Catch 22--Insurance Company Says No

Insured has replacement cost coverage but cannot rebuild without insurance proceeds. Insurance company now says insured restricted to ACV because building not replaced within time allowed in policy. Can insurance company get away with this?

Answer: That sounds a little bit like the boy who killed his mother and father and then pleaded for mercy on the ground that he was an orphan! A case analogous to yours is Moots v. Bankers Life Company, 707 P.2d 1083 (Kan. App. 1985). A disability policy provided that if the insured engaged in any work for profit, he was ineligible for benefits. Despite the fact that the doctors said he shouldn't work because of a heart condition, the insurance company cut off his benefits. The insured, having no other way to support his family, took a job driving a school bus. The Court held the work did not disqualify him because the insurance company forced him to take the job when his doctors said not to.