Hess v. North Pacific Insurance

This case concerns the amount payable under the replacement clause of a homeowners insurance policy when the destroyed building is not repaired or replaced and the insured has no intent to repair or replace. This is the first occasion for this court to interpret such a replacement clause.

The facts are stipulated. Defendant, North Pacific Insurance Company, insured a summer cabin of plaintiffs Timothy K and Georgianne H. Hess. The cabin was destroyed by fire. The agreed actual cash value was $20,000. The agreed replacement cost was $43,182.10. The insureds did not replace the cabin, nor do…