Diamond v. Insurance Co. of North America

JEFFERSON, J.

JPlaintiff appeals from judgments entered following the sustaining of general demurrers of respondent insurance companies to his first amended complaint. In the complaint plaintiff sought recovery under • a replacement cost endorsement which was added to the fire insurance policies issued to him by -respondents.

1

Plaintiff alleges in his first amended complaint that, he was the owner of improved real property which was insured by defendants against various perils, including riot and 'fire; the policies provided that, upon the occurrence of any of the perils insured against, the insured would be paid ‘1 actual cash value” for the loss (“actual cash value” constituting the sum resulting by subtracting depreciation from replacement cost) ; thereafter, an endorsement (set out in the complaint as Exhibit A) was added to each policy providing for-, if the insured so elected, replacement cost coverage (or coverage for the actual cost of replacing or repairing the damaged structure) ; subsequently on August 13, 1965, a loss occurred as the

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result of the “Watts riots”; defendants paid plaintiff the actual cash value of the loss but refused to pay the replace.ment cost.

. Plaintiff’s original complaint (which also pleaded the endorsement by way of exhibit), includes the additional allegation that plaintiff has not replaced or restored the insured •property, nor does he presently intend to do so.

The endorsement in question contains paragraphs numbered 1 through 8. Tlie relevant provisions are set out below:

Paragraph 2. “In consideration of the application of the ■average clause provisions and the premium of the policy to which this endorsement is attached, the provisions of this policy applicable to the property described in paragraph 1 above (the property described includes buildings covered by the policy) are amended to substitute the term ‘replacement cost’ for the term ‘actual cash value’ wherever it appears in this policy, including endorsements attached thereto, thereby eliminating any deduction for depreciation subject, however, ■in all other respects to the provisions of this endorsement and of the policy to which this endorsement is attached. ’ ’