Actual Cash Value Depreciation Deduction and the Broad Evidence Rule



...even though he advertised them for sale for $12,000; that he had submitted an affidavit to the local assessors saying that the buildings had no value as they were only suitable for the manufacture of malt liquor, which was illegal under Prohibition; and that the best offer he had received for the property was $6,000.

In the court case that followed, the jury awarded McAnarney $55,000. The insurers appealed and the Court of Appeals reversed the lower courts. It wrote:

Indemnity is the basis and foundation of all insurance law. The contract with the Insurer is not that, if the property is burned, he will pay its market value, but that he will indemnify the assured, that is, save him harmless or put him...

“We sometimes think that all policies are written on a replacement cost basis and that ACV is only of academic interest, but that’s not correct.”