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Insurance Q&A of the Week: Loss Settlement and Increased Costs

The current cost of lumber and other building materials is unusually higher than normal; how does this affect claim settlement when the loss occurred before the building materials become so expensive?

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Hello, My question is in regards to claim payments. We had hail claims in May and June of 2020 and have made ACV payments for the damages. We have holdback available for replacement cost coverage HO-3 policy form HO 00 03 05 11. With the dramatic increase in building materials and labor, do we owe the extra costs or the cost at the time of loss? Some claims have more than doubles in cost. Thank you!

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