sections 2051 and 2051.5 require that an insurer pay the “policy limit” of a homeowner’s policy whenever the house is destroyed, irrespective of whether the insured rebuilds the house, and that the “policy limit” of their Policy includes the $64,920 provided for in the endorsement. Allstate filed a motion for summary judgment in which it argued that it had timely paid the Minichs the full “policy limit” under sec- tion 2051, subdivision (b)(1), and that the additional $64,920 represented an amount above the policy limit. Allstate maintained that it was not required to pay the additional $64,920 until and unless the Minichs rebuilt their house. The trial court granted Allstate’s


motion. Affirmed. Insurance Code sec- tion 2051.5, subd. (a) provides that, “If the policy requires the insured to repair, rebuild, or replace the damaged proper- ty in order to collect the full replace- ment cost, the insurer shall pay the actual cash value of the damaged prop- erty, as defined in section 2051, until the damaged property is repaired, rebuilt, or replaced. Once the property is repaired, rebuilt, or replaced, the insurer shall pay the difference between the actual cash value payment made and the full replacement cost reason- ably paid to replace the damaged prop- erty, up to the limits stated in the poli- cy.” The court held that under this statute, Allstate was not required to pay


the additional $64,920 until the proper- ty was “repaired, rebuilt, or replaced.” The policy makes it clear that the BSREL endorsement requires payment for an amount in excess of policy limits when certain conditions are met – it does not simply increase the policy limits.


Jeffrey Isaac Ehrlich is the principal


of the Ehrlich Law Firm in Encino. His practice emphasizes insurance bad-faith and appellate litigation. A Harvard Law graduate, he is certified by the State Bar of California as an appellate specialist. He has twice been selected as Appellate Lawyer of the Year by the Consumer Attorneys Association of Los Angeles.


Neurosurgery • Orthopedic Surgery • Neurology • General / Vascular Surgery • Pain Management General Medicine • Plastic Surgery • Psychology • Physical Therapy • Chiropractic Diagnostics (MRI/CT Scan/X-ray) • Liens Accepted


APRIL 2011 The Advocate Magazine — 95


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