Sec. 2827.
(1) An insurer may issue a fire policy, insuring property, by which the insurer agrees to reimburse and indemnify the insured for the difference between the actual cash value of the lost or damaged insured property at the time of the loss or damage, and the amount actually necessary to repair, rebuild, or replace the lost or damaged insured property to a condition and appearance similar to that which existed at the time of the loss or damage based on the use of conventional materials and construction methods which are currently available without extraordinary expense. The insurer's liability shall not exceed the amount of liability covered by the contract of insurance.
(2) The contract of insurance established pursuant to subsection (1) shall not preclude an insured from selecting a cash settlement based on the actual cash value of the lost or damaged insured property at the time of the loss or damage, but not to exceed the amount of liability covered by the contract.
(3) The contract of insurance established pursuant to subsection (1) may provide that there shall be no liability on the part of the insurer to pay an amount in excess of the actual cash value of the lost or damaged insured property at the time of the loss or damage, unless the lost or damaged property is actually repaired, rebuilt, or replaced at the same or another contiguous site. However, this subsection shall not apply if the amount of loss or damage to the insured property under the standards of subsection (1) exceeds the amount of liability covered by the contracts.
History: Add. 1979, Act 145, Imd. Eff. Nov. 13, 1979 ;-- Am. 1990, Act 305, Imd. Eff. Dec. 14, 1990 Popular Name: Act 218
Structure Michigan Compiled Laws
Chapter 500 - Insurance Code of 1956
Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302)
218-1956-28 - Chapter 28 Fire Insurance Contracts (500.2804...500.2866)
Section 500.2804 - Fire Insurance Contracts on Property Herein Deemed Made in Michigan.
Section 500.2806 - Policy or Contract of Fire Insurance; Requirements.
Section 500.2807, 500.2808 - Repealed. 1990, Act 305, Imd. Eff. Dec. 14, 1990.
Section 500.2810 - Printing Regulations on Fire Policy.
Section 500.2812 - Combination Fire Policy; Mandatory Provisions.
Section 500.2816-500.2824 - Repealed. 1990, Act 305, Imd. Eff. Dec. 14, 1990.
Section 500.2828 - Repealed. 1990, Act 305, Imd. Eff. Dec. 14, 1990.
Section 500.2832 - Repealed. 1990, Act 305, Eff. Jan. 1, 1992.
Section 500.2833 - Fire Insurance Policy; Mandatory Provisions; Coverage.
Section 500.2834 - Fire Insurance Policy; Exclusion Related to Terrorism; Definition.
Section 500.2836 - Breach of Warranty or Condition as Defense; Payment of Losses.
Section 500.2840 - Repealed. 1990, Act 305, Imd. Eff. Dec. 14, 1990.
Section 500.2842 - Average or Pro Rata Clause; Form; Filing and Approval.
Section 500.2850 - Repealed. 1962, Act 71, Eff. Mar. 28, 1963.
Section 500.2860 - Contrary Provision Void.
Section 500.2862 - Repealed. 1978, Act 219, Eff. Dec. 5, 1978.