EDWARDSVILLE – An Illinois man has filed a proposed class action lawsuit against the American Family Insurance Company, claiming the company undercalculates insurance payouts by calculating repair costs as depreciation.
Plaintiff Bradley Martin filed a class action lawsuit in the Madison County Circuit Court against American Family Mutual Insurance Company, S.I, citing breach of contract.
According to the lawsuit, on March 27, 2021, an insurance policy between Martin and American Family Mutual Insurance Company was in effect for a recreational vehicle (RV) that was damaged due to flooding. Following the damage, Martin made a claim against the insurance policy, with American Family calculating its actual cash value (ACV) obligation. The obligation was paid out to Martin.
Martin states that American Family chose to use the "replacement cost less depreciation" (RCLD) methodology when calculating ACV. In calculating RCLD, American Family subtracts depreciation from the "real cash value" (RCV) of the damaged property, which allegedly includes non-material costs, including labor costs to repair the property.
Martin claims that by improperly including labor costs under depreciation to determine ACV payments, American Family has breached its contract by paying him and other policyholders less than what they were entitled to receive under the terms of their insurance contracts.
The plaintiff is seeking monetary damages for himself and the proposed class, plus court costs, interest, attorney fees, and any other relief the court deems proper. The plaintiff is represented by the attorneys of Byron, Carlson, Petri & Kalb, LLC, in Edwardsville, and T. Joseph Snodgrass of Snodgrass Law, LLC, in Minneapolis.
Madison County Circuit Court case number 2023LA001091