January 2024 Volume 17, No. 1

Journal of Insurance & Indemnity Law header


Actual Cash Value is not Market Value, no matter how it is spun

Douglas McCray

By Douglas G. McCray, McCray Law Office PLLC

Most early fire insurance policies provided coverage on an actual cash value ("ACV") basis. Traditionally, this meant insureds could expect to be paid based upon the "replacement cost" ("RC") of the damaged part of the insured property less depreciation (i.e., wear and tear, discoloration etc.). Later, especially in the home insurance context, insurers would offer policies providing for payment of the undepreciated RC. However, even with these the insurer only had to pay the depreciated amount prior to the insured's repair or replacement of the property. Many such RC policies specifically referenced depreciation in connection with ACV This definition of ACV was consistent with two early Michigan standard fire insurance policy statutes and several other parts of the insurance code and might have led one to think it was so well-established that no-one would question it. However, some 95 years ago New York's high court decided the foundational case for what would become known as the broad evidence rule, which in addition to depreciation allowed consideration of "every fact and circumstance which would logically tend to the formation of a correct estimate of the loss" in calculating ACV (McAnarney v Newark Fire Ins. Co).

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Annual Meeting Presenters

By Hal Carroll

In addition to the elections, there were two presenters at the IIS annual meeting on October 19, 2023: Representative Brenda Carter and Anita Fox, Director of DIFS.

Brenda Carter, of the Michigan House of Representatives, is the chairperson of the Insurance and Financial Services Committee. She said that when she was appointed to the committee, she knew nothing at all about insurance, so she studied the topic and now has a certification in property and casualty insurance. She also taught herself about the financial services part of her committee’s purview and learned about how banking works, including the part that community banks play.

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From the Chair

Patrick Crandell

Hello Section members! Thank you so much for entrusting me, our Executive Team and Council with leading the Section over the next year. For those that missed the annual meeting, it was very encouraging to have a contested Council election, as it shows how much interest there is in the Section’s work.

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Legislative Update: Busy Fall Before an Extra-Long Recess!

Katharine Buehner SmithJames J. Hunter

By James J. Hunter and Katharine Buehner Smith, Collins Einhorn Farrell PC

It was a busy fall in Lansing. Capitalizing on their majority in both the Senate and the House, the Democrats aggressively advanced legislation before ending the session early at the start of November. Two Democratic state representatives were elected to mayoral positions in November, leaving the House now split evenly 54-54. Those positions will be filled by special elections in 2024.

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Recent Notable No-Fault Opinions

Eric Conn

By Eric P. Conn, Fahey Schultz Burzych Rhodes

Unpublished Court of Appeals Opinions

Pre-Existing Injuries Were Not Threshold-Injury Dispositive Nor a Roadblock to Proceeding in a Third-Party Case

Serena Robinson v Farm Bureau General Insurance Company, Unpublished, Docket No. 364047

This third-party case arose out of a three-vehicle accident. The plaintiff’s vehicle was traveling in the left lane, intending to turn left when it was rear-ended by the defendant’s vehicle. The collision caused the plaintiff’s vehicle to veer right, and it was struck again by another vehicle. The plaintiff declined medical attention at the scene but went to urgent care the following day complaining of neck and back pain. Eventually, the plaintiff sued the defendant. The defendant alleged that the plaintiff’s injuries were not objectively manifested and did not affect her general ability to lead her normal life. The trial court agreed with the defendant and granted a motion for summary disposition. The plaintiff appealed and the Court of Appeals reversed and remanded for further proceedings.

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This journal is published by the Insurance and Indemnity Law Section, State Bar of MichiganChristine Caswell, Journal Editor.

Opinions expressed herein are those of the authors or the editor and do not necessarily reflect the opinions of the section council or the membership.

If you have an article idea for the Journal, please contact the editor, Christine Caswell.


Officers & Council Information

2023-2024 Council Pictorial PDF


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