Sproull v. State Farm Fire and Casualty Co.

This case presents trial court’s certified question that asked “where Illinois insurance regulations provide that the actual cash value or ‘ACV’ of an insured, damaged structure is determined as replacement costs of property at time of loss less depreciation, if any, and where policy does not itself define actual cash value, may the insurer depreciate all components of replacement costs (including labor) in calculating ACV?” Appellate Court, in answering certified question in negative, found that average homeowner would have reasonably expected that depreciation would apply only to physical structures and tangible materials and not labor costs.